Mortgages Allowing Builder Incentives

[Deleted User]

Anyone here with specific new build mortgage experience? I've seen a few folks on here I think...

We're looking for a mortgage at the moment that will accept builder cash incentives. Buying with Barratt. Not sure what the incentive will be at the moment, stamp duty or deposit boost etc.

Barratt gave us the contact details of their preferred advisers, New Homes Mortgage Advisers (They are not the New Homes Group I've seen mentioned elsewhere though). They deal with the Barratt development we're looking at and seem to know them and have someone who looks after that site specifically.

When speaking to them, they seem unsure about whether lenders will accept incentives. For example The Nottingham was one lender they recommended (I found out by comparing rates and fees and they confirmed it) however when I spoke to The Nottingham they said it was unlikely they'd accept incentives but sometimes 'it depends' on the adviser. I didn't think their rates were that good tbh.

Anyone got knowledge of which lenders are reliable when using incentives? I'm aware of the likely need for 85% maximum including the incentive.

Bit hard to pin a deal down without having a plot to reserve yet so unable to negotiate.

Thanks

kingstreet

Lenders differ on this issue.

Some lenders differ on incentives depending on use of HTB Equity Loan and even loan to value on non-HTB cases.

For example, Halifax 90% LTV has to include incentives as none aer allowed in excess of that but are allowed at lower loan to value limit, usually 80%. On HTB some incentives may be allowed, but are limited so only 95% of equity purchase inc incentives is allowed.

kingstreet

swaledale wrote: »

Barratt gave us the contact details of their preferred advisers, New Homes Mortgage Advisers (They are not the New Homes Group I've seen mentioned elsewhere though)

The outfit in Cannock, not Connells NHMH?

[Deleted User]

That's right, the ones in Cannock. I wondered if there was a disadvantage to using them as they do seem the 'pet' advisers.

[Deleted User]

We will likely have 10% deposit but really want to bring the LTV to 85% with incentives if we can. It seems a bit chicken and egg in that you have to know the mortgage to go for before really negotiating, otherwise you could end up negotiating a worthless or unaccepted incentive! If you get me!

kingstreet

Builders like to keep control over timing and that's the reason they have preferred brokers and solicitor panels.

TBH I wouldn't be mentioning lender names to a potential client without first making sure the incentives are acceptable. We only use Nottingham for 90% newbuild stuff where no incentives are allowed, IIRC. Not sure about lower LTVs.

[Deleted User]

Yes, to be honest I guessed the lender name and they had little choice but to confirm really. I just don't understand the uncertainty about allowing incentives for a lender - either they do or they don't. I don't want to proceed with an application and negotiate a deal only to be told it's not acceptable, that's not helpful to anyone. I can only guess that the lender can apply exceptions for some brokers and not others, especially if they have a track record.


L&C also have a new build department and they thought the number allowing incentives was even less.


Is there a commonly accepted bunch of lenders that would be good fit for 90% or 85% with incentives? Disregarding rates of course, just WRT lending criteria.

kingstreet

I can't think of any lender which accepts incentives at 90%.

Those at 85% or less vary in the percentage they will accept and differentiate between cash and non-cash incentives.

I really would tell the broker what is being offered and ask them to come up with the best options for you.