New Build LTV

sleepyshell

Hi

We are looking at buying a new build and have paid £500 reservation fee to secure the plot.

We had an affordability check meeting with Nationwide which confirmed the amount we could borrow and we had already done a lot of calculations ourselves to calculate monthly repayments, etc so know the repayments are fine.

I've just phoned Nationwide to get the decision in principle (tried to do this before paying reservation fee but was on hold for ages and gave up) and have been told that we have to have a maximum LTV of 85% as it's a new build. After a search online I managed to find this on the Nationwide website, but why doesn't it say this on any of the other checkers or in the affordability meeting? Feeling a bit deflated now.

Waiting for a financial advisor to call me back so hopefully he will know of a product out there for us.

In the meantime, have any of you got any experience of lenders who will give a mortgage with a 90.66% LTV on a new build? We could get the LTV down to below 90% but 85% is a stretch too far.

Thank you for reading and for any advice/recommendations.

Dave_Ham

Can you not utilise the Help To Buy Equity Loan?


Alternatively there are few options at 90% loan to value, likely to need a broker though or some serious reading.

kingstreet

At what point did you tell Nationwide you were planning to purchase a newbuild?

As DH has said, you can go for HTB - EL to increase your deposit, or there are a couple of lenders who offer 90% on newbuilds.

sleepyshell

Thank you both for your replies.

I told Nationwide that it was a new build when I rang to make the appointment. They said we had to go to an affordability check meeting which we did today, and once again we said new build and that we were just waiting for Redrow to give us an offer for part exchange (not sure if I mentioned PX on my first post).

Their affordability checker is the same as the one on the website, so it actually seemed pointless to go in to fill in the same details. It came up that we could borrow about £50k more than we want, and there was no mention of LTVs, just that we should phone for a decision in principle once we knew what Redrow were going to offer for the PX.

The financial advisor called earlier and said that Nationwide do the Newbuy scheme so potentially could do 5% deposit and port our first mortgage (on 2.5% rate) and then do the remaining amount on a new mortgage (this would clear a top up from the last house move which we stupidly put on a 10yr fix in 2007). He has said he needs to check criteria with Nationwide on Monday so I'm worried that maybe they don't do this anymore, and TBH I can't find the rates he mentioned on their website - although I'm sick of looking at their website! Fingers crossed this is an option, but he also said there may be a couple of 10% LTV products out there, so we'd just pay a bit extra off the capital to get to 90%.

Not sure if we can do the equity loan with PX, but will have a look at this tomorrow.

Dave_Ham

Sometimes other advisors scare the life out of me, although to be fair it may be a mis-communication.


Get your broker to check everything again, as many issues here.


Kingstreet is your new build detail man, hopefully he will have time to correct your current mis-information.

sleepyshell

It was all going so well until this afternoon!

The advisor is ringing us again tomorrow, and to be fair to him I was feeling rather deflated after my conversation with Nationwide so potentially I could've misunderstood some things.

Hopefully my head will be a little clearer after a sleep so I can get searching and reading tomorrow. There is so much information out there though, and not all of it relevant and up to date, so half the problem is knowing where to start - and that's why I love MSE!

A bit off topic, but there should be internet monitors who search the web deleting anything out of date - and they should start with the HMRC site as that drives me mad at work!

kingstreet

If the builder wants to offer the property on NewBuy (they have to pay for this) and has an agreement with Nationwide, that may well be an option.

NewBuy products are very specific, so they may well not be published on the nationwide customer site. However, they are here;-

http://www.nationwide-intermediary.co.uk/products/product_finder

and they can be found by choosing NewBuy from the dropdown.

Part Ex is not available with HTB - Equity Loan, but an Assisted Sale can be.

sleepyshell

Thanks Kingstreet

I found the professional intermediaries site when I was searching via google for the newbuy info. No wonder I couldn't find it on Nationwide's website. At least I'm not going totally mad!

I've been up early (you're an earlybird like me!) doing some calculations. We can use savings to bring our LTV down to 90%. This is about £1500 which covers a months worth of interest too, and then the next actual mortgage payment is on 1st July which will definitely ensure we stay below 90%. This does mean that we are dipping into some savings which are needed for completion, but at least it is all capital off the mortgage. As the one part of our mortgage is on the BMR then we won't incur any cost by overpaying more than £500 per month.

This then makes me worry that we might have to ask parents for some help with stamp duty, etc but we could pay them back within about 3 months of completion.

I'll have a search for assisted sale information. I wonder what the cost is for Redrow of the newbuy scheme. Not likely that I'll find it, but won't take long to have a little search.

Thank you for your help. You've given me some ideas about areas to look at and also questions to raise with the advisor when I speak to him this afternoon. I just wish Nationwide had said that we needed 85% LTV, as we'd never have even looked at this new build if we'd known. Even making lending criteria obvious on their site would be good (like the post office site has) unless it's there but I've just not seen it.

Thanks

sleepyshell

Having looked on Redrow's site, the Newbuy scheme isn't available on the development we're after.

So, time to forget all ideas of that scheme and look at the 90% LTV options. And will also look at assisted sale.

kingstreet

The builder can pick and choose what property it offers on NewBuy, so don't discount it just yet. It will probably mean no incentives on the property though, as it has to pay away 3.5% to the Government's indemnity fund.

An assisted sale involves the builder helping with selling costs and marketing. You'll need to ask your builder about its scheme.

FWIW you normally find only the mortgage technicians in a lending operation would know the difference on newbuild LTVs. The early-stage "drones" would not be familiar with lending criteria. Hence, it's easily findable in the intermediary site;-

http://www.nationwide-intermediary.co.uk/lendingcriteria/property_and_construction/valuation#newbuild_valuation

ethank

If you can stretch to 90% LTV ask Redrow if they will give you a 5% gifted deposit as an incentive. This will mean that you can get to 85% with Nationwide.