New Build mortgage whilst owning flat

shinyahashimoto1

Hello,

I live in a flat with a Home Report worth 50k. I have 31K left on the mortgage. I am putting this on the market this week, however i am concerned in todays market it won't sell until offers of low 40's(it's a nice flat but not a great area, local market saturated with flats for sale)

If I accepted an offer of low 40s, I would not have a large deposit to buy a older(non-new build) house with for an 85%-90%

An option I've thought about is buying a new build from a builders with MI New Home(Scotland) - 95% mortgage & and renting my flat out for a few years to drive some of it's mortgage down(rent could cover mortgage easily as mortgage is so small). The MI New Home 95% mortgage scheme is not just for FTB so i would be eligible(in theory).

Basically my question is - would I be allowed a 95% mortgage if I also have the Flat(and therefore 31k of debt)?

ethank

I'm not a mortgage advisor, but in the process of buying a new build.

I've found that lenders will not lend you more than 85% of a new build. I doubt you will find a mortgage lender who is prepared to offer 95% on a new build.

So you either need to stump up 10% equity of new build price and negotiate a 5% builders gifted deposit or 5% and get HTB/MI New Home.

I understand that these schemes will not allow you to buy a second property, and your solicitor is instructed to not complete until such time as the property is sold.

I wish you all the best.

kingstreet

MI scheme is the equivalent of NewBuy, which is available upto 95% even on a newbuild flat.

I can't answer the question about the existing property. You'll have to speak to the scheme administrator or your builder/lender.

ethank

The Scottish are very lucky!

shinyahashimoto1

Thanks for the responses guys. Like Kingstreet said, MI New Home is purposely so you can get New Builds on 95% mortgages, much like England's NewBuy scheme.