First Time Buyers - New House

dannyrst

Myself and my partner are looking at buying our first apartment and have found a development of new houses and apartments. One of the apartments is very cheap due to incentives offered which reduce the price significantly.

We are confused and would like an idea of what to expect from the process before we go to view the show home. Because it is a new home, the plot hasn't been finished yet and is due for completion around January 2016. Because of this, we would be renting until this time.

In what order do things happen. To secure the property, we would need to put a none refundable deposit down, but as we are first time buyers, I'm not really comfortable doing this until we can confirm we would be accepted for a mortgage. Is this done first and then the deposit put down? If so, is it a case of having a mortgage approved and then assuming our situation is the same or better in January, we would be able to continue as is?

Current Rent - £495 per month
Apartment Value - £89,000
Deposit - 5%

We would also be able to reduce our monthly payments using the government scheme to reduce the LTV to 75%.

Any help appreciated.

kingstreet

This is from another thread but it specifically deals with HTB - Equity Loan cases.

This is the way we do Equity Loan cases in England;-

Check lender and HCA Affordability Calculators
Obtain agreement in principle
Preliminary reservation done with builder and solicitor selected
Property information form and reservation submitted to HTB Agent
HTB - EL Authority To Proceed issued (ATP)

All the above is done in the first week.

Formal reservation completed and fee paid (exchange of contracts expected within 28 days)
Full mortgage application submitted
Lender valuation done and supporting docs submitted
Mortgage Offer issued
Solicitor submits Authority to Exchange (ATE)
Contracts exchanged with completion "on notice" when build over

All of the above is done within 28 days of ATP issue.

Property finished and kitted out to buyer's spec
Demonstration visit and snagging inspection
Notice given
Solicitor submits Forms 1 & 2 for Equity Loan release
Completion takes place, keys and money change hands and mortgage payments commence.

All of the above, several months later and completion can be upto nine months from ATP, upto six months from ATE.

libf

Are you confusing a reservation fee with a deposit? Reservation fee secures the plot, and deposit is paid at exchange of contracts.

If you mean reservation fee, are you sure it's not refundable? If the home is offered with an NHBC warranty then it must be refundable (less admin costs).

jaxkesa

The reservation fee is usually non-refundable if you pull out. If you go ahead then it will be deducted from the deposit you need to provide. At least that's how it works for the builder I am going with.

libf

It's refundable on all houses sold with an NHBC warranty. You may be told it's not, but if you press and quote the code you will get the fee back minus costs.

'If we cancel this agreement, you agree to pay back to us the reservation fee less any reasonable expenses you have incurred as a result of us reserving the plot, including your administration, internal legal processes, external legal processes and re-advertising. '

kingstreet

http://consumercodeforhomebuilders.com/

This covers all NHBC builders.