106 agreement/resale covenant mortgages

Hi Huys,

We have a holding deposit on a lovely affordable home in Cornwall but can't find any lenders willing to lend us a mortgage below ridiculous ltv for first time buyer. Does anyone have any experience of this? It just seems like a scheme for affordable homes actually leads to unaffordable mortgages.....

feeling pretty upset now.

Comments

  • ethank
    ethank Posts: 2,197 Forumite
    Holiday Haggler I've been Money Tipped!
    Is this a new property?
  • amnblog
    amnblog Posts: 12,690 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Is this a resale covenant deal?
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • armandog
    armandog Posts: 12 Forumite
    it is a newbuild and the 106 stipulates that only those with a local link can purchase and i understand this is why banks steer clear? Ironic thing is that housing is in such demand here that would never happen! The house is still 6/7 months from completion and we have over half a 10% deposit but there's no way we could get to 20%. Can anyone help/advise?
  • kingstreet
    kingstreet Posts: 39,186 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    TBH your issue is as much about it being newbuild and your lack of deposit, as it is the s106.

    Lenders don't like lending more than 80% to 85% on newbuild houses, less on flats. There are only a few lenders who will do 90% and with the S106, they will all drop out.

    Is there no HTB - Equity Loan option?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • armandog
    armandog Posts: 12 Forumite
    thanks, we've found quite a few lenders who will do 90ltv on a new build, but the s106 will probably make a klaxxon sound in the call centre! It just doesn't seem like good value anyway. paying 20% and then having to sell at a discount. Totally contradicts the idea of s106 affordable housing. more like unaffordable housing!
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