Help - New build mortgage provider

Confused_consumer_2

Hi

I need a bit of help. I have been looking for a new home for a while now and finally found a new build by a builder called Strata in West Yorkshire. I visited there site and found my perfect home. So I reserved the plot I wanted and the sales adviser told us it was one of the last properties to be built on the site and it wouldn't be ready to move into until the mid to end of next year.

Great I thought it would give me time to save for the deposit and find a good mortgage deal. Due to the company I work for I qualify for a good deal on a mortgage (although this is due to be reviewed at the end of this year). So I have been back today to show my family round the show home and mentioned in passing the provider I was planning on using. However, the adviser has said 'you won't be able to use that company, as we are only allowed to have a certain amount of mortgages with any one provider and we have already used the quota up.'

This doesn't seem fair to me as if I want to move into the house the next best rate I have found (as long as the quota for that provider hasn't been used) means paying an extra £175.00 per month (which over 25 years would be £52,500 as long as the difference in the percentage stayed the same). Even after the additional tax this would incur it would still see me pay £1,000's more over the 25 year mortgage term. In addition as the house will be the last one to be built I am guessing the providers with the best rates will already have gone.

Does anybody know if there any regulation stating only a certain number of properties can be mortgaged to certain providers for new builds or is it just Strata?

Thanks in advance

chanz4

sounds like they want to get a back hander, you choose your lender

Thrugelmir

Confused_consumer wrote: »

Does anybody know if there any regulation stating only a certain number of properties can be mortgaged to certain providers for new builds or is it just Strata?

Lenders are part of their risk quantification, do restrict the amount they will lend in any one locality or postcode. In the case of flats will only lend on a certain number of properties in the entire block.

Are you looking to use the Help to Buy scheme?

Confused_consumer_2

Hi Thrugelmir

Would it not be the lender restricting lending and not allow the mortgage to progress instead of the builder?

Yeah, I am looking to use Help to Buy. Does this make a difference?

Thanks again

kingstreet

There are currently nine lenders offering products on the HTB - Equity Loan scheme. More will be signed up by the time you are ready to apply.

Typically, lenders will accept upto about 30% of the property on one site, as more than that is considered too risky. If there was a problem, they could end up with far more exposure than they like. It is also an anti-fraud measure.

The builder is telling you the truth.

http://www.mortgagefinancegazette.com/legal/building-lenders%E2%80%99-defences/

Lenders now routinely limit their exposure on new build developments to a specific number of properties. This is a small but vital step in combating fraud – the past years have seen lenders suffering massive exposure over certain key developments (most of which will be well known to fraud and professional negligence lawyers). By reducing its exposure on any individual site, the lender benefits from a corresponding reduction in exposure where a fraud is later uncovered.