New Build LTV

sleepyshell

We've been down to the plot (my legs are too fat for wellies!!). They will do Newbuy on ours, but it isn't mentioned on the development pages as an option as it is being managed by the South Wales office even though it's in England. So, that puts me back to a half smiley face but obviously all depends on Nationwide I guess.

Now it's an afternoon of gardening and tidying, as even if this all falls through we will be putting our house on the market.

Thank you all for your help and suggestions. I'll let you know how we get on.

ethank

Did you ask them if they would do a gifted deposit - I understand that builders have to pay a 3.5% percentage based fee to obtain, and then you owe them shared equity in the future. If they gift you 5% or even the same amount as the fee (3.5%), you would not have to deal with the problem of rising costs of redeeming equity in the future.

brit1234

ethank wrote: »

Did you ask them if they would do a gifted deposit - I understand that builders have to pay a 3.5% percentage based fee to obtain, and then you owe them shared equity in the future. If they gift you 5% or even the same amount as the fee (3.5%), you would not have to deal with the problem of rising costs of redeeming equity in the future.

Lenders don't like gift deposits after all the fraud pre 2008. You now have to inform the lender of the gift deposit and they will most likely refuse.

Builder use to use gift deposits to inflate the sales price.

kingstreet

ethank wrote: »

Did you ask them if they would do a gifted deposit - I understand that builders have to pay a 3.5% percentage based fee to obtain, and then you owe them shared equity in the future. If they gift you 5% or even the same amount as the fee (3.5%), you would not have to deal with the problem of rising costs of redeeming equity in the future.

There's no shared equity on NewBuy.

The builder contribution to the indemnity fund covers against future repossessions, similar to HTB - Mortgage Guarantee.

lovehackney

Didnt read the whole thread, but I was in a similar situation a few weeks ago, needing 90% LTV on a new build flat, and wasnt able to use any of the schemes. Only lender we found was Aldermore, a specialist lender, and rates were c.5%+. So not very competitive! Anyway we managed to raise our deposit to 15% in the end so didn't use them but from the 4 brokers we spoke to, that was the only lender they could find. If you are buying a house, there may be a couple more lenders.
If you can get 15%, first direct and woolwich offer mortgages.

ethank

brit1234 wrote: »

Lenders don't like gift deposits after all the fraud pre 2008. You now have to inform the lender of the gift deposit and they will most likely refuse.

Builder use to use gift deposits to inflate the sales price.

Lenders will accept gifted deposits on New Builds as long as it is stated on the CML form. I put offers in on four houses last year, and negotiated one on every single development.

ChopperST

We had the same issues last year purchasing our new build property.

A specialist broker helped find us a 90% LTV with the Skipton, not sure if they are still a new build lender or not but worth giving them ago. Again our broker dealt directly with an underwriter to help argue our case.

sleepyshell

Hi All

Once again, thank you for your replies.

We're in the hands of the financial advisor now. He is completing paperwork today for credit checks (which should be fine) and then it'll be on to the application for the Newbuy scheme porting our two exisiting mortgages (don't want to say goodbye to our 2.5% BMR rate on the biggest loan!). We meet the criteria, so unless Nationwide throw another spanner in the works then this will be us on our way to our lovely new house.

Even though we've got 90.44% LTV, we'll only put forward 5% deposit and use the remainder to cover fees so that we don't have to use as much of our savings. Any spare money at the end of each month will then be ploughed back in as overpayments to reduce interest. I like overpaying and wish we'd started doing it years ago!

I so hope we're on the right track now.