Off plan new build valuations

nwilliams222

Hi,

Just been speaking to HSBC regarding a mortgage for a new build we're interested in buying. The house won't be completed until December and the foundations have not been laid yet.

HSBC informed us that they could not proceed with a formal mortgage application until the foundations of the house were laid. Has anyone experienced this and do other lenders do the same thing? Last time I purchased a new build was some time ago and buying off plan wasn't an issue, but obviously times have changed.

TIA

Simon_gloster

Why in earth would you want to apply now, the rate will expire before completion for a start or offer, whichever first do you'll be forced onto new deals and rescored anyway. Have you thought the property might depreciate in value requiring another valuation.

Madness!!!!

nwilliams222

Ideally we would apply in late July/early August so that the 6-month offer would extend into January (to cover slippage). I do not think the builder will wait until then to exchange contracts, although that is to be discussed.

Therefore, I was assuming that we would have to get an initial offer (fee free mortgage) to get past EoC, and then re-apply for a new mortgage nearer completion. The new application works in our favour as we should get it down to 70% LTV by then.

ATM I'm just trying to understand the best approach and what constraints there are, hence my question on valuations.

Simon_gloster

In general they are valid for 3 months. If you apply in the summer, the valued will realise it's nit into superstructure then and will re inspect at a later date possibly compromising the amount your willing to pay.

It's possible to do what you want to do and may complete ok however there are lots of negatives and it could all end in tears.