FTB and New Build Off plan question

cashbackproblems

hi

I am a FTB just wanted some advice as have recently started looking for my first property. I am buying in the South (Hertfordshire/Watford) and so far it seems intensely competitive and people offering the asking price or above within days of coming on the market (i know this is a London specific problem)

I have come across a new build due to be completed in November but will start selling in June and given how the local market is and the price of these i expect these to be sold off plan immediately, so want to be ready to place a reservation fee.

I have a good credit rating, no debts and earn 50k and will be buying solo, i also have about 40k deposit and have held an account with HSBC for many years and will be getting a quote from them, what are my chances of buying this property which is 250k for a 2 bed? Is it possible my mortgage will get accepted but then the banks surveyor values it lower than 250k (would be surprised but heard it can happen?).

While i have 40k in cash already and can prove, i also have 35k in funds and shares that i don't wish to cash in but can this be used as some type of security to show the mortgage company or proof of affordability if required?.

Also when reserving a new home, will the developer want any mortgage in principle or proof or earnings, or just the reservation fee which i have heard usually is £500. The work has not even started yet but just want to be prepared.

thanks for any pointers.

zarf2007

cashbackproblems wrote: »

hi

I am a FTB just wanted some advice as have recently started looking for my first property. I am buying in the South (Hertfordshire/Watford) and so far it seems intensely competitive and people offering the asking price or above within days of coming on the market (i know this is a London specific problem)

I have come across a new build due to be completed in November but will start selling in June and given how the local market is and the price of these i expect these to be sold off plan immediately, so want to be ready to place a reservation fee.

I have a good credit rating, no debts and earn 50k and will be buying solo, i also have about 40k deposit and have held an account with HSBC for many years and will be getting a quote from them, what are my chances of buying this property which is 250k for a 2 bed? Is it possible my mortgage will get accepted but then the banks surveyor values it lower than 250k (would be surprised but heard it can happen?).

While i have 40k in cash already and can prove, i also have 35k in funds and shares that i don't wish to cash in but can this be used as some type of security to show the mortgage company or proof of affordability if required?.

Also when reserving a new home, will the developer want any mortgage in principle or proof or earnings, or just the reservation fee which i have heard usually is £500. The work has not even started yet but just want to be prepared.

thanks for any pointers.

normally the developer has a broker and solicitors that they recommend to speed things along, i would recommend you go with them as they can sort out a mortgage deal. Just because you have banked with HSBC does not mean they will be the best rate, and for a loan this size, its better to get a broker shop around.

Normally they want proof of income (last 3 payslips, last 3 months bank statements, ID and proof of deposit). They will also likely need a contact name for a person at your employer who can confirm your position and salary.

They will need a mortgage agreement in principle that the broker can sort out.

Kynthia

I wouldn't go with HSBC just because you've banked with them. There is a whole market of lenders out there and not all of them are the best for your circumstances and the property itself. Some lenders are more geared up for mortgages on new builds so I would be looking for a mortgage broker who is experienced in new build purchases and seeing what they have to say about your circumstances and borrowing ability.

kingstreet

When the letters "HSBC" are mentioned to our builders they wince and remind the purchaser of their obligation to exchange contracts in 28 days and that the build might over-run and completion may be more than six months away...

cashbackproblems

thanks for the replies, just to clarify i am not buying directly from the developer as they are using the estate agent Connells to manage sales, Connells did say to me we have our own broker/mortgage advisor you can speak to but i thought estate agent recommended ones were usually more expensive?

I thought the process would just be easier as i am already a HSBC customer so they have my details, salary gets paid in there and about 5yrs back they did approve me for a MIP (but i left to work abroad so didn't take it up)….no harm in speaking to another broker/banks

The proof of income will not be a problem.

cashbackproblems

kingstreet wrote: »

When the letters "HSBC" are mentioned to our builders they wince and remind the purchaser of their obligation to exchange contracts in 28 days and that the build might over-run and completion may be more than six months away...

thanks, not sure what you mean by this that HSBC are slow? As the flats will not be built until November can i only apply for the mortgage nearer the time?

Also do you think my salary of 50k and 40k deposit will be enough for this place which is £250-260k? When i look at my monthly mortgage payments (1.2k) v my take home pay (2.8k) i can afford it. Plus i hope to get a lodger in the spare room paying £500pm.