new build nightmare over sales incentives

Dotty-Dot

My son is trying to buy his first new home through a well known house builder. The sales incentives were written on a form (not CML form) and he has a copy. It included Help to Buy scheme (5% deposit), household stuff like appliances, stamp duty paid (£2100) and £1000 towards solicitors fees. Son was bowled over and loves the house. Solicitor had to be the one chosen by the builder (conflict of interest?) and not the cheapest either. Sales rep had assured him he would get everything on the incentive list even though we thought there might be a problem and told him there were ways of getting round things.

Independant Financial Advisor got him a mortgage with Nat West as she said it was the cheapest that would do Help To Buy. (Halifax had turned them down because they were already up to their limit on the site). Mortgage was approved with Nat West but they will not allow cash incentives so son has to pay the £3100 cash before the deal can progress.

Son has already paid out £1000 which he does not want to lose but feels like the builders mis-sold the deal deliberately.

Can anyone offer any help please?

jwren

Hi there. Not an expert, but I'm buying a new build which the developer has added turf, carpets and stamp duty. We are looking to go with Halifax for the mortgage, who won't allow any money off list price or extras etc. I mentioned this to my MA who rang the developer to tell her that if these were included in the plot and not listed as extras then the mortgage company wouldn't mind. Not sure on the ins and outs of it, but they had to redo the reservation forms. There might be a way around it like there was for me?

Good luck x

Dotty-Dot

Thank you for your reply. Nat West are adamant that they cannot allow son to have any cash incentives. The appliances, turf etc they are fine about but not the stamp duty. He could not have Halifax because they already had too many mortgages on this estate. I don't know if NatWest are well known for refusing cash incentives but someone along the line has cost our son an extra £3k and he is wondering whether to carry on or pull out

kingstreet

someone along the line has cost our son an extra £3k and he is wondering whether to carry on or pull out

Who chose NatWest, when there were incentives involved?

Dotty-Dot

The finacial advisor said it was the cheapest mortgage available that did the Help to Buy scheme. Are you saying that we should have known that Natwest did not allow cash incentives?

themull1

Could your son pay the 3100 by borrowing of someone, then get the money off the builders?

Dotty-Dot

There is no guarantee they would pay up because it cannot be part of the contract. Also I think it would be classed as mortgage fraud!

claret_mike

Get builders to reduce asking price by £3100 and you pay for cash incentives?

Dotty-Dot

Thanks for the suggestion but that poses 2 problems. Firstly it mean son has to have cash up front when he is already stretched to limit to pay deposit and assoiciated costs of buying a house rather than just adding it to his mortgage.

The other issue is that the builder will not reduce the house price because it sets a precedence to future sales on the estate. Now that house sale prices are available on the internet for all to see, reducing the price will effectively devalue future plots.

I just really want to understand how this has happened and who is to blame - the builder or the financial adviser.

Thanks

claret_mike

I would have said that the financial advisor should have understood the structure of the deal and how that would sit with the lender.

Who recommended the IFA to you?

From what I read on here, the mortgage advisers all seem very familiar with the HTB scheme - did your IFA seem confident - just because Natwest was cheapest, it's not usually what I would expect from a professional adviser as it should be the deal that best meets your needs.

You need to speak to the IFA and understand why they chose the lender they did when it didn't fit criteria.

If the deal had failed on something you had hidden/been unaware of then I could understand why this may have happened but if you knew and fully disclosed this, I would have expected the adviser as part of their research to check whether this was acceptable before submitting the business.

If the IFA was recommended by the builder, I would go to them. If you chose them, I would be asking IFA to put you back (as best as possible) in the position you were prior to the application, i.e. any fees refunded etc.

Smiley_face

Try a different lender......Woolwich are doing help to buy now and Abbey, as of very recent. It's not really the IFA's fault as they could only Halifax and Natwest until recently.