Advice for first time buyer 31 March 2015 at 2:08PM in Mortgages & endowments 7 replies 716 views

MNM2903

Okay so this is what ive worked out so far, any input i can get would be greatly appreciated.

Property Value - £144950

HTB Equity Loan 20% or £28,990

5% Deposit £7,247.50
5% Builder cash incentive £7,247.50

Mortgage required £101,465

The problem is the decision in principal was for £98,000 and the mortgage required is for £101,465 are we able to top this up with our own cash or would this simply reduce the 5% builder cash incentive were eligible for from bellway who are building the houses?

kingstreet

I think I answered this in your other thread an hour or so ago...

http://forums.moneysavingexpert.com/showthread.php?p=68077205#post68077205

MNM2903

Yeah you gave me figures but you had mentioned we would need a deposit of around 10k. Please forgive my stupidity but I'm struggling to understand this as I've worked it out at a lot more. And I'm not sure how it would work with the builder cash incentive.

Are we as buyers putting down £7247.50 which is 5% allowed to fund that more to cover the £3465 as we can only get the mortgage for 98000 not the 101465 and if we did put that extra do the builder cash incentives still give 5%

kingstreet

The HTB equity loan is based on the purchase price you agree with the builder (10% or 20%).

The builder cash incentive is based on the purchase price you agree with the lender (upto 5%).

These things are therefore set if/when the price is set.

What you can borrow from a lender is what the lender you have chosen is prepared to lend based on what you earn and your outgoings.

Your deposit is the amount you need to make up the difference of the above.

MNM2903

Brilliant, thanks for your help mate, appreciate it. Its alot to take in. We have an advisor but hes coming back to us Thursday with figures about rates etc as he has an application approved for us.

Ill discuss it more with him ive just been trying to arm my self with knowledge so i dont come across like a complete idiot with my advisor haha

ftb2015

When we did htb with 5% deposit, we were told that lenders do not it when you have incentives from builders, therefore we couldn't take advantage of the builders offers. We were told that by the builders and also by 2 brokers. Couldn't quite get my head around why but that's how it worked out for us. We ended up with just £300 towards solicitors fees!

Hope you manage to get it, but don't rely on it just in case.

kingstreet

ftb2015 wrote: »

When we did htb with 5% deposit, we were told that lenders do not it when you have incentives from builders, therefore we couldn't take advantage of the builders offers. We were told that by the builders and also by 2 brokers. Couldn't quite get my head around why but that's how it worked out for us. We ended up with just £300 towards solicitors fees!

Hope you manage to get it, but don't rely on it just in case.

From the OP's other thread;-

"One or two lenders will accept builder cash incentives upto 5%, most won't; so you won't have the run of all the HTB lenders if you go this route."

brit1234

mullen8627 wrote: »

Property Value - £144950

HTB Equity Loan 20% or £28,990

5% Deposit £7,247.50
5% Builder cash incentive £7,247.50 :eek:

Mortgage required £101,465

I thought they got rid of gift deposits after the 2007 property crash. They are just a corrupt tool used by big builders to inflate house prices.