Trouble finding mortgage, advice on options?

C22DTJ

You were right, Dave, the builder did manage to budge a little

Barratt called me today and they've structured a new 'final' offer.

Property was listed at £179,000, dropped to £165,000 and here's the offer;

10% bought by the Government on the new buy scheme, 10% bought by Barratt, and 80% mortgaged by me. I'd put down a £29000 deposit and Barratt would 'gift' a £8750 deposit.

The 20% owned by the Government/Barratts is interest free for 5 years, then interest is payable monthly at £40 (3.5%), the balance must be paid after 25 years, valued at the time of repayment.

The mortgage payments for us (on a Halifax 2 year fixed at 3.8%) come in at around £495.

Now on paper, this looks good. It's £200 p/m below what we'd budgeted for mortgage payments, and the terms of the 80/20 share don't sound too unrealistic.

Now I just need to decide whether I'm happy about purchasing a property sandwiched between 5 social housing properties, and in the knowledge a further 14 council flats will be built in the coming 12 months.

Part of me thinks it's not a problem, I mean, it's a house after all, and you could argue that we're kind of purchasing affordable housing ourselves. But there's a part of me that has read the horror stories of people buying on new developments and losing masses of money on property with large amounts of social housing on.

Am I being ridiculous?

Thrugelmir

C22DTJ wrote: »

Doesn't look like a good outlook, certainly doesn't make a £200k 3 bed house an attractive investment.

Buy a home not an investment. That's my personal advice.

As for social housing. In my experience money doesn't buy manners or courtesy. So its pot luck. Better to buy an established development though. Then you can get an idea of the neighbours.

C22DTJ

Thanks, Thrugelmir.

I see your point and there's definitely sense in just forgetting about the investment stuff and relish the fact it's a decent house.

I think the thing that makes the decision harder is the fact that realistically this house is cheaper than anything we're currently likely to find on established areas. Certainly in terms of the quality of the property, which is undeniably very good. Both my partner and I love it on the inside and after all the stumbling blocks we've been faced with in trying to find a mortgage, it might even be the only property in this sector of the market we can actually buy!

There were a few suspect kids hanging around on the driveway of the house when we viewed, but then again, there's absolutely nothing to say they weren't just inquisitive kids exploring the new area, as we all once were.

princessdon

What is their criteria for the social housing?

Do YOU qualify?

If you do, you may not feel the same as you do now

C22DTJ

It's split, 30% is shared ownership, and 70% is private/council tenants.

I'm all for housing key workers, struggling parents, struggling single parents and anyone else making a valid contribution. What I don't support however, is those who spend all day at home living on benefits they shouldn't be entitled to and often causing problems to those around them.

We don't qualify for a number of reasons. My partner and I both work. My partner for local Government on a reasonable salary, and me as a struggling designer! I just finished my undergrad degree which I did part-time outside of working full-time, paid for by me (fortunately before the fee raise, I should add), and I'm just starting a Masters on the same terms (in my free time whilst I continue to work). So hopefully, things are likely to improve for us financially over the next couple of years.


I don't think I'd want to qualify either. I don't really feel like I 'deserve' discounted, or even free housing. I don't even want financial support, I just wish the lenders would give us a chance! On paper it's well within our budget and we're both in our mid-twenties with a good history of credit. Our deposit just isn't quite enough and current income multiples won't stretch to the amount we need.

With that said, maybe it's just worth holding out for a bit.

princessdon

Ah reason I asked was the builders my sister bought from had a scheme where FTB earning under £60K got a lot of help.

So she went from wondering about affordabiliity of her new home to basically getting the same home cheaply.

It was under 60K for her and as a graduate she was very grateful for their help.

But sounds like you have explored all this with them and it doesn't suit.

harvey115

The rule of thumb would be to stay a little away from the SH/AH, although the law says that every site has to have a certain percentage of these.

I am currently renting in a NewBuild and this site does not have one of the SH because the builder paid the penalty of not having one. Even then the properties are mostly filled with tenants because the initial buyers were foreign national investors.

The NewBuild I am buying now has SH but slightly away from the actual site, which is good for everyone.

I would guess lenders may also have a bit of favour against SH as well, due to the problems that may arise. However I am not 100% sure about this.