Help to buy scheme mortgage advisors

ging84

I recently was trying to buy a new build property, i was given the card of an independent financial advisor, this seems to be fairly standard, they have done this at all the new builds i have looked at.
We were happy with the house, and could see that houses were selling well under the list price, so expected to be able to put in an offer once we had seen all the plans and paper work etc. Before we could get to that stage, they wanted us to go back to the mortgage advisor to do the full application, and this is where my troubles began.
When i spoke to him i asked if it would be possible to do the application for a lower amount, as i had a maximum price in mind and didn't really want to be talked into paying any more, he recommended not doing this, and applying for the maximum amount, as what ever he puts on the application has to go through to the house builder with the help to buy scheme forms, so it would need to go through at the asking price initially. Unfortunately our maximum loan came in a little lower than the asking price, it was still above the figure i had initially wanted put in the application so should not have been a problem for me. However once he passed on these details to the house builder that our max affordability was under the asking price for the property we wanted they have made us an offer on a plot we didn't want which is still more than we wanted to pay and are refusing to talk about the other plots or come down at all on price, saying head office have offered us this deal specially because of our affordability, even though we can see they have sold better plots for less.

What i am wondering is has my 'independent' mortgage advisor ever been looking out for our best interests, did he have to let the house builder know our max affordability due to the help to buy scheme, or should/could he have kept that confidential ?
The other thing that makes me question if he is looking out for me is there is an incentive scheme from the mortgage lender where they pay the stamp duty, which i had already been told about by another mortgage advisor, this guy made not mention of it either in our initial conversation or our conversation about the application details i had put through to him. At the end when he asked if i had any questions i asked about mortgage incentives, he said what do you mean, i explained about the stamp duty and he said yeah that's right that's the one we are applying for. I get the feeling though that he has both the options and if i had not mentioned it, he would have given me the mortgage without the incentive and pocketed a much larger commission, does that sound likely ?

monty-doggy

It sounds to me exactly like he is getting a commission from both seller and mortgage provider. I would contact the sales office direct and tell them you are not obliged to use a mortgage advisor and you wish to make offer direct. Or find a totally independent advisor.

CluelessFTB_2

I was always under the impression you agree a price with the builder after you have your DIP from the mortgage provider?

kingstreet

A few points;-

- it is unlikely the broker is being paid by the builder

- brokers do not get paid more on different products. Halifax SD incentive product gets us the same commission as one without.

HTB process;-

- HTB affordability calculator completed by broker
- decision in principle for mortgage
- reservation of property with builder
- completion of property information form
- submission of forms to HCA HomeBuy Agent
- issue of Authority To Proceed
- full mortgage application
- mortgage offer, exchange of contracts etc.

The builder has to know about affordability as you must fit within the guidelines on income multiple and debt to income ratio. You can't pick and choose after the event. You need to decide on a property and a purchase price before you reserve and submit the HTB forms.

thedalmeny

When i went in i looked at houses and told them i wanted to use the HTB scheme if possible, didn't not know whether i'd be eligible due to high income and no debt.

I rang the independent broker and they did a credit check and preliminary check with Homebuy Agent, took around 1-2 hours as we had lunch. We did it based on the list price.

We then went back to to look again and negotiate knowing what we could lend and be about as close to possible without doing a formal application that it would be successful, they were willing to negotiate then.

Got:

- £192,000 list down to £182,000
- Free carpets
- Free turf
- Free Integrated Fridge / Freezer
- Stamp Duty Paid (Halifax FTB mortgage incentive)
- 3.59% 2 year fixed with no fee.

All approved on scheme, mortgage offer received and contracts received. Just now waiting for the local search.. Not long now

okborednow

thedalmeny wrote: »

When i went in i looked at houses and told them i wanted to use the HTB scheme if possible, didn't not know whether i'd be eligible due to high income and no debt.

I rang the independent broker and they did a credit check and preliminary check with Homebuy Agent, took around 1-2 hours as we had lunch. We did it based on the list price.

We then went back to to look again and negotiate knowing what we could lend and be about as close to possible without doing a formal application that it would be successful, they were willing to negotiate then.

Got:

- £192,000 list down to £182,000
- Free carpets
- Free turf
- Free Integrated Fridge / Freezer
- Stamp Duty Paid (Halifax FTB mortgage incentive)
- 3.59% 2 year fixed with no fee.

All approved on scheme, mortgage offer received and contracts received. Just now waiting for the local search.. Not long now

Not wanting to hijack this thread but that's amazing Dalmeny, want to give a potential help to buyer a few tips?

ging84 it's possible the builder's unwillingness to negotiate is a sign of how well the development's selling? We;re looking at 2 developments at the moment, one is in a nicer area and the houses appear to be flying out the door so i wonder if there'd be much room for negotiation as the know if we won't pay the price someone else will. The other development properties and taking longer to sell so i suspect i may have more luck there. It's just a guess though.

thedalmeny

All the houses on the site i've bought have sold off plan, the only have houses now that will be built in 6-8 months time are for sale. Our house wont be ready to move into till end of august / beginning of September and since then all the ones of our type are now sold and they won't be build till end of September / beginning of October.

It's a nice estate, the only housing association are bungalows and even then there are tucked away on other side of estate.

My house personally has nobody overlooking as it backs onto a protected field and is in a cul-de-sac 8 or so houses. So pretty much what you want from a new build.

Tips? I think everybody negotiates differently. I went into three different house builders in the area and made clear i was willing to put down a reservation fee today if we saw one and that i had gone through a pre-approval with broker (who confirmed that to them).

I did however go 2 days after HTB had started and most builders didn't know many details, all saying it's likely they couldn't give discounts. After i started getting discounts from one builder, they all started to offer them.

Just be honest, don't be to cheeky and go with your gut. We personally went with the builder who had the least pushy sales person. She was great. Providing they know you are willing to commit and have the means to follow through with the sale, i think they become more interested.

As far as i understand it there can be many reasons though.. Could be close to their end of year or they want some money in the bank in order to fund further development.. Who knows. Incidentally the end of year for the builder i'm using is end of July, so will exchange contracts just before that. So that may well have played a part.