mortgages vs 5% gifted builders deposit and incentives

martimarti

Hi there,

I have started a new Thread as I couldn't find any new post regarding this subject.

Me and my husband we are buying a new house from Taylor Wimpey for £250k.
They have offered us a 5% builders gifted deposit and also developers incentives.
I know that some of the banks are not happy about this, as this will decrease the value of the property.

Do you know any good mortgage offers around?
So far the best offer we got is with HSBC, however they are not happy about the 5% builders deposit and the incentives.

Will the developers incentives increase the property value, and would take us to higher tax band ( 3% instead of 1%)?

Have you got any experience in this subject?
Please advice!!!

amanda270583

hi im currently in the same process as you im buying from barratt homes i originally agreed to pay 145 with carpets and appliances (to note the house was marketed at 159) i found a mortgage through the halifax but due to there terms and conditions barratts could not discount the property by more then 5% so alls barratts did was reduced the asking price to 152 and gave me a 5% gifted deposit which has been accepted by halifax hope that helps

Fitzy83

Also in a similar situation to you. Just purchased a new build with Barratts, they've given 5% gifted deposit and a few incentives (2% stamp duty and some carpets)

Got a mortgage offer from nationwide and hasn't been a problem for them with the incentives. From what I understand, a more likely problem is the mortgage valuation may come back lower as they take the incentives into account and think that the builders have overvalued in the first place. (I think!)

But all in all shouldn't be too much of a problem. Have you gone through a broker?

martimarti

Didn't use the broker.
We have 35% towards the deposit and TW gives us further 5%, that makes 40%.
HSBC gives so far the best rates. We have been searching via all websites.
I have an appointment with broker tomorrow, but still theirs offer is quite bad.

My worry is that, if the bank will underestimate the value of the house then I will have to pay the difference by cash. I doubt TW will be keen down value of the asking price

Fitzy83

A broker will at least know who to target regarding those people who will accept 5% builders deposits. I could have got a slightly better rate than NW but needed them to accept the incentives so hey ho.

I know what you mean, I was fraught about the valuation but mine came back as fine even with all the incentives (that totalled about 18k!!!). Maybe I got lucky there!

I'm sure a mortgage advisor will be around here soon, they'll know what to say :-)

martimarti

Thanks Fitzy831

What Bank did you go with at the end?

Fitzy83

No probs. Nationwide through a broker and its been pretty painless. Good luck!

Sparx

Fitzy83 wrote: »

No probs. Nationwide through a broker and its been pretty painless. Good luck!

Was there any benefit through a broker? Where they able to take advantage of broker-only products with Nationwide? I'm just curious for when we come to purchase a new build later in the year!

Do Nationwide have a minimum deposit for new build homes? i.e. HSBC say you have to get a 85% LTV mortgage for new build homes or lower.

Fitzy83

No idea if they had access to different products. i doubt it, but it made my life easier to have somebody doing the hard work for me (for free)! Barratts suggested I use their recommended (but independent) brokers for the main reason that they prioritise the developers business and developers always want a quick exchange.

Think the standard is 85% LTV max on new builds everywhere, although there might be somebody who goes higher. Most developers do this 5% gifted deposit now as I only had 10% but needed the extra 5% to secure the mortgage.

Interestingly, this NewBuy scheme they do (5% deposit) was an option for me but Barratts would offer me NOTHING in the way of incentives if I went down that route. Really weird.

For me I felt I needed the broker. FTB, new build, builder gifted deposit. They pointed me in the right direction and saved a lot of time on my part. And when the developers put unrealistic demands on you (28 days exchange!) time is of the essence!

martimarti

we got 5% towards the deposit and 5% of incentives from TW.
That makes 10% from TW in total of somehow discount from the builder.
My worry is that the broker has only the limited offers.
HSBC has a very good deals of 2.9% APR
I had a look at Nationwide, but theirs offer is almost 3.4% APR, and this makes a huge difference with the repayment amount

Fitzy83

Have you looked at Abbey? Think they have rates at 2.94% for 70% LTV so could be an option. And they will accept vendor gifted deposits on new build developments.