Only 3 lenders do 90% mortgage on new build?

mmcg

Hi all

Just a quick question, I am looking at buying a new build house in Scotland, I am probably going to have to get a 90% mortgage, I have just spoken to the financial advisor that the seller put me in touch with and he says that only 3 lenders will do a 90% on new builds, is this true? The one he quoted me for was the Halifax which is about £80 a month more than other deals I'd seen, I just want to make sure he's not trying to steer me towards this because it gives the most commission! The other 2 he mentioned were Skipton and clydesdale but he said these are harder to get a mortgage with when the builder has included incentives

Thanks in advance

kingstreet

Halifax doesn't accept cash incentives at 90% either.

It's true. There are only a few lenders offering 90% on newbuild houses.

Be careful, depending on how long before the property is built/finished. Clydesdale only offers for three months and the chance of an extention is determined by what's happened to rates in the interim. If your product is no longer available, you have to pick a new rate.

ACG

Skipton pay more commission than Halifax - So I do not think that is the incentive. Ease of getting it through may be though? But that in turn may be of benefit to you.

stator

Doesn't surprise me. New build houses are risky. New houses often fall in value for the first few years. No-one really knows what level they will settle at. So a mortgage lender would be foolish to offer 95% on a house when they don't know if they could sell it for 95% when repossessed.

mmcg

Thanks for the replies. The house will be finished in March so the 3 months shouldn't be an issue. The incentives are carpets, kitchen appliances etc, I'm not sure if these countries count as cash incentives? If so would Halifax look unfavourably on this?
My current mortgage provider is nram where I have both a secured and unsecured part of the mortgage, I am considering reverting the unsecured part to a loan so I that I do not have to repay it immediately and instead use it to allow me to get an 85% mortgage which I assume will open up more lenderd/better rates?

kingstreet

No. Cash incentives, are cash, such as builder deposit, stamp duty paid, legal fees paid etc.

Non-cash incentives are usually permitted by Halifax. I don't know about Clydesdale.

A delinked NRAM Together loan will be rated at 12.78%, so be careful the new cost doesn't outweigh the savings.

mmcg

Hi, we do have 1 cash incentive then, they are paying the stamp duty of £300. I have spoke to nram today and they have said my particular loan will track at 5% above their svr (so around 9.8% at present but this is variable), the girl from nram did seem a bit confused by this however as she had expected it to be 8% above svr

kingstreet

AFAIK all Together de-linked loans see 8% added to the loyalty rate, current 4.78%. I'd request it in writing if I were you.