Builders Incentives & what mortgage lender will accept

richkid316

Hi,

I'm just looking for a point in the right direction as struggling with a few things...


Looking at buying a property in Scotland so looking to use the Gov back scheme of 20% gov + 5% from me.

Have spoken to the builders about what incentives they offer and they have advised that they can only offer 5% but, from what i understand, that can be made of up stamp duty etc as long as their contribution does not exceed 5%.

I asked about cash back incentives and was advised that wasn't available as it would impact on the price of the house, is that the case?

I would be looking at cashback on completion so would have thought that there would be no impact to the builder or the home cost at that point - or have i missed something?

Hope that makes sense...

ethank

It depends on the local rules. In England & Wales there are some areas where Stamp Duty contribution is allowed, however in Buckinghamshire where I bought under HTB it was definitely not allowed so the builder had to discount my sale by the amount of the Stamp Duty.

kingstreet

richkid316 wrote: »

Hi,

I'm just looking for a point in the right direction as struggling with a few things...


Looking at buying a property in Scotland so looking to use the Gov back scheme of 20% gov + 5% from me.

Have spoken to the builders about what incentives they offer and they have advised that they can only offer 5% but, from what i understand, that can be made of up stamp duty etc as long as their contribution does not exceed 5%.

I asked about cash back incentives and was advised that wasn't available as it would impact on the price of the house, is that the case?

I would be looking at cashback on completion so would have thought that there would be no impact to the builder or the home cost at that point - or have i missed something?

Hope that makes sense...

Moat lenders deduct cash incentives from the valuation, so effectively, all you get is a price reduction.

On HTB - EL, Halifax requires the mortgage + the incentive to be no more than 95% of the 80% share.

Appoint a whole market broker, or get stuck in to some serious research.

Thrugelmir

Incentives merely overstate the purchase price of the property. So will impact the lenders valuation. All incentives are now clearly disclosed and no longer hidden. Which is part of the builders undertaking when participating in Government schemes.