New build mortgage

Fiveboy

Hi people,

Maybe one for the MSE brokers

We have started the process of buying a new build that will be ready at the end of the year. We have a broker doing the mortgage part for us, they originally found a LTV 30% 5 year fix for us for 2.39% with £995 fee and no valution which we were really happy with. But they came back to us the following day to saying the system made a mistake and a revised offer of 2.99% was given.

I then checked the lenders direct website and the interest rate is much lower in 30 LTV group, saying that the 20% LTV was lower than our broker offer.

when i question the broker why are interest is higher than the lenders website rates they said its because you are buying a new build, is this normally the case? as i thought lenders only cared about the LTV.

kingstreet

Depends on the drawdown deadline.

If the lower rated product has to be drawn-down by the end of July, it's useless to you if you won't complete until December.

makeitstop

kingstreet wrote: »

Depends on the drawdown deadline.

If the lower rated product has to be drawn-down by the end of July, it's useless to you if you won't complete until December.

Is this the case with "all" new build mortgages KS.?

Does this mean that if someone wishes to buy a house which is due to be completed at the end of this year, that any mortgage and corresponding rate they found, say in August, would not be applicable and a higher rate would be all that's available to them, due to date of drawdown.?

Are there mortgages with longer draw down dates than others.?

Can you say who these lenders may be if that's the case.?

kingstreet

Offer periods and drawdown deadlines vary from lender to lender with some as short as three months. Others have nine months and one twelve.

It's only a disadvantage if rates have risen. We're currently having a few cases re-offered on new products and the rates are lower and there are cashbacks which didn't exist when we did the applications last September.

In this case, the builder has revised its build timetable, leaving us having to do this as the drawdown deadlines will pass before the builds are complete.

One client insisted on using a lender with only a six month offer period going against our advice. We are now having to reapply from scratch, new docs, everything.

Seeking broker advice on this and actually taking it would be the best option in such circumstances.

makeitstop

Thanks KS, good info.

I am about to apply to "who knows where" for a mortgage for exactly this kind of situation. A new build we are consdiering is due to be ready late this year, and so we were thinking of making an application sometime in maybe August / early September.

For us, the LTV is low at approx 28%, with good affordability, no adverse history whatsoever, same address for 20 years and so on. I'm hoping this wil prove a solid basis to get an offer without too much fuss, but God only knows in the current market.

NW appear to be competitive on our terms, so hopefuly their policy is a decent one.

We will see.

libf

makeitstop wrote: »

Thanks KS, good info.

I am about to apply to "who knows where" for a mortgage for exactly this kind of situation. A new build we are consdiering is due to be ready late this year, and so we were thinking of making an application sometime in maybe August / early September.

For us, the LTV is low at approx 28%, with good affordability, no adverse history whatsoever, same address for 20 years and so on. I'm hoping this wil prove a solid basis to get an offer without too much fuss, but God only knows in the current market.

NW appear to be competitive on our terms, so hopefuly their policy is a decent one.

We will see.

I'm currently waiting until early August to put in an application with NW for a new build due to be completed Dec/Jan. You have 180 days (~6 months) from application with them.

makeitstop

libf wrote: »

I'm currently waiting until early August to put in an application with NW for a new build due to be completed Dec/Jan. You have 180 days (~6 months) from application with them.

Yes, I was under the impression that was the case from speaking with them. The problem is, that in this current market, it's hard to know exactly what's what, or what may change even.

Thanks for confirming it though. Good to know I was not the only one given this information.