Mortgage borrow amount. . .

LeoT

Hi,

Looking for some advice on getting a mortgage for a new home.

Hoping to put down a deposit on a new build that should be ready next March. Purchase price is £185k; however, we will be putting down £20k as a deposit. Our joint income is £37k.

I’ve had a search around the internet and ive found around 3 or 4 lenders who may let to borrow what we want. Our only debt is a 10k loan which will be paid off when we sell our house. I've done some sums on what our monthly outlays may be with a £165k mortgage and it seems doable.

We can't get a mortgage promise just now as the lenders have said it's way too soon.

So I guess what im asking, is it too big a risk to reserve a house and complete the missives without having a definite mortgage setup.

Thanks
LeoT

JoeK_3

You may be doing this the wrong way round.

You should see a mortgage broker and get a decision in principle arranged with the best lender. The lender will issue you with a certificate confirming that they are willing to lend. Assuming that your circumstances do not change, then you should be able to proceed.

Further than this, you will be able to discuss affordability, insurances, etc. and move forward with the knowledge that everything is in place including your budget.

Regards

JoeK

Jonbvn

LeoT,

I bought my new-build house in a similar manner to what you propose. However, you should ensure that the small reservation fee you pay is not too large, since it will not be refunded if you pull-out. I paid GBP100 (I think).

Note that a lot of developers offer various "carrots" if you exchange and/or complete on a given schedule. You should have a mortgage offer in place before you exchange.

I would strongly recommend that you have the house inspected by a professional, before completion. I used newbuildinspections.com, who came up with a list of about 200 defects. I insisted that the serious defects were rectified before completion.

Hope this helps.

Mr_helpful

An agreement in principle would be an idea but not that much help as march is a bit far off. You need to see a broker