Mortgage Company valuation less than purchase price - what can we do?

ixwood

If you go ahead, then you can't say you weren't warned. Why do you think we're all spent time advising you? There's no profit in it for us.

those threads scare me and I've never even thought about buying a new build or flat.

In summary, you're paying well over the odds for probably the worst possible type of property at the worst point in the last 10 years.

Instant negative equity. You know, that thing people have nightmares about and which has ruined many people before/

And it's not just a case of "oh well, don't want to movefor a few years anyway". Try getting a remortgage for 120% or whatever (150%'s probably not out of the question IMO) in 2 years time. You won't be able to. Hence stuck on standard variable rate = rip off rate.

ixwood

And that's the situation now. Throw possible crash/stagnation, credit crunch and recession/depression into the mix and it just gets (a lot!) worse.

I can't be any blunter than to say I personally think you'd be mad to go ahead.

Save up a bit and get a nice little house instead. Or least a properly priced apartment/flat if that's what you really want.

ixwood

It does make interesting reading... The builders are quite clever "putting up" deposits on these things, knowing fine well, otherwise financially unsuitable people have little choice and won't be able to resist.

Just part of the "want everything now (without working for anything! And regardless whether it's bad value)" society we're unfortunate to have evolved into.

ixwood

Just reading through those horror stories. What's a "Luxurious" apartment anyway? Especially a one bed.

Maybe they had bruno in mind.

Guy_Montag

DD is right, re-read the thread first thing in the morning - look at what people are saying

1) Everyone gets 5% off, it's simply a method of marketing to appeal to people without a deposit.
2) Everyone gets carpets and "upgraded" kitchen, these are factored into the original selling cost.
3) The salesperson isn't to be believed.
4) The bank wants to protect it's money, that means not taking silly risks - they feel that buying this flat at full price is a silly risk.
5) New-build flats are bad value for money
6) If you start this transaction in negative equity it will make remortgaging very difficult, there is a good chance you will be stuck on the SVR at 7.5% (ish)
7) None of us have any interest in whether you buy or not apart from just being decent people not wanting to see someone come unstuck. Not one person has said buying is a good idea.


Have I missed anything?

Right start saving your own 5% deposit - that's about £8k, do some ninja moneysaving. I presume you must have a joint salary of around £35k, so you should be able to save that in a year, probably less.

In the mean time spend a lot of time studying the local market - keep an eye out for places that are sticking on the market for a long time that you can put a low ball offer in on.


It's up to you, but if you do buy expect to be back here in 2-5 years, if not befiore.

devils_advocate

Don't worry, I can help you get a deposit for the flat. In fact for just 30 seconds effort, I can give you an instant profit of £5000.

All you have to do is allow me to sell you a teabag for £5000.35. But don't worry, I'll give you £5000 off if you buy it.

See - you've now made a £5000 profit! Use it towards your deposit!

So, if you can see the fallacy in this argument, apply it to your situation as above. If you can't, don't buy the flat cos its going to be painful for you later.

And have you also noticed - I've just sold a teabag for 35p!

Shadowplay_2

Hi everyone,

Well i have read through the post and discussed the situation with my partner.

We are running like the wind back to the land of the sane!

I am phoning Persimmons in the morning and pulling out of the deal, just read the small print of the agreement and we should get our £250 deposit back as well.

The flat was nice but this thread has scared the life out of us...

It’s nice to see the big guns out like lynzpower and dithering dad offering advice so cheers everyone for taking the time and effort to leave your advice. :T

My partner and I earn a combined income of around £47,000+ but this will increase over the next few years (I'm an educational professional and my partner works for a union - website).

We currently have around £4,000 in savings (no debts) and our rent is very cheap for the area of Manchester we live (£395pm). We have been renting for over three years and just really want to buy our own place

Oh well guess its back to routing through the estate agent windows and saving, boooo!

S.

Guy_Montag

Now that you know you want to buy a place use that as the incentive for saving, remember every £1 saved = £2 less that you have to pay back.

ixwood

Great news.

Saving can be fun. Wait until you've got a few grand saved up. It's fun just checking on it...

CYBERCIDERSAVER

and you can always keep an eye out for one of those flats. they're bound to come up for re-sale within the next two years and they'll have lost their premium!!!

Saving you a fortune!:rotfl: