Confused over mortgages & new build incentives

jstiff

Hello all, our previous house purchase fell through at the weekend, so we decided to go for a new build near us. The house is built and has been decked out with carpets/turf/better fixtures/tiled floors etc etc to get a sale.

I am a bit confused over LTV of the property and also incentives and would like a quick bit of help. We have a broker who will be looking into this when I tell him all the details but can't get my head around it.

So some facts:

Headline price of house £259,950
Additional options fitted to the house circa £6,500

What we agreed:
£2,000 off house headline price
Not pay the £6,500 options
Stamp duty paid £2,898

Now, we are not going down the help to buy route as I have what I believe if my maths are correct 15% deposit which I calculate to be rounded up to £39,000 (15% of £257,950) is this correct? or do the bank view it different because of options etc?

Mortgages I have seen I am interested in are West Brom and Nationwide

All help appreciated

Thanks

Funny_old_game

Your LTV is off the purchase price not including any add ons.

kingstreet

You can still use HTB - Equity Loan (10% or 20% loan) with 15% deposit. Contrary to public belief, it's 5% minimum deposit, not 5% maximum.

Loan to value will be the mortgage amount divided by £257,950, as this will be the contract price.

jstiff

kingstreet wrote: »

You can still use HTB - Equity Loan (10% or 20% loan) with 15% deposit. Contrary to public belief, it's 5% minimum deposit, not 5% maximum.

Loan to value will be the mortgage amount divided by £257,950, as this will be the contract price.

Thanks guys.

The sales lady at Wimpey said I must tell my broker about all the incentives as they need to know about it for my mortgage as she said some have problems with the stamp duty being paid. Not overly sure what she meant!!

miss_sparkle

We had to tell our broker and it was all noted down with the solicitor etc as the maximum incentives allowed for our mortgage were 5% I believe so we couldn't go above that! we also had stamp duty! turf! carpets etc etc thrown in

jstiff

miss_sparkle wrote: »

We had to tell our broker and it was all noted down with the solicitor etc as the maximum incentives allowed for our mortgage were 5% I believe so we couldn't go above that! we also had stamp duty! turf! carpets etc etc thrown in

Ah that might of been what she meant.

So I make it around 4.5% of incentives. That's if I'm adding up all the right things!

The other house falling through has set us back 8 weeks, I relaxed so much when we got our last offer, now I have to be all worried again :mad: this house is better though so must be worth it in the long run.

bclark

I don't think they can really class those add-ons as an incentive anymore or really prescribe an inflated value to them.

They form part of the house now, they are can't remove them.

kingstreet

Some lenders won't accept incentives of any kind and will deduct them from the valuation, others will allow non-cash incentives while still others will accept cash incentives upto 5% of the purchase price.

You should ensure your broker knows about them, but all he needs is a copy of the reservation to be able to see them and that should be a standard request.

MrDebtWarrior

We are in the same situation Jstiff.

We were offered 5% off list, legals and stamp duty paid. We spoke to our Mortgage Advisor and she explained that some mortgage lenders do no allow us to take all of the incentives, for example Santander would only show the 5% reduction but nothing else.

We have applied through Nationwide who apparently are okay with us taking all 3.

The house is also carpeted/floored, fitted kitchen with oven/hob and integrated fridge freezer, and turfed. (We got a smashing deal)

jstiff

Kevvlar wrote: »

We are in the same situation Jstiff.

We were offered 5% off list, legals and stamp duty paid. We spoke to our Mortgage Advisor and she explained that some mortgage lenders do no allow us to take all of the incentives, for example Santander would only show the 5% reduction but nothing else.

We have applied through Nationwide who apparently are okay with us taking all 3.

The house is also carpeted/floored, fitted kitchen with oven/hob and integrated fridge freezer, and turfed. (We got a smashing deal)

Nationwide is who I would like to go with, so that sounds promising.

Good luck with yours.

jstiff

kingstreet wrote: »

Some lenders won't accept incentives of any kind and will deduct them from the valuation, others will allow non-cash incentives while still others will accept cash incentives upto 5% of the purchase price.

You should ensure your broker knows about them, but all he needs is a copy of the reservation to be able to see them and that should be a standard request.

Thanks Kingstreet, you've made me feel better about all of this. Now I just need to stop worrying about the whole new mortgage application, I mean we got accepted on larger value mortgage with a higher LTV 2 months ago so hopefully this won't be a problem!!