Deposit increase

The_Humph

So my DIP was successful, 85%ltv, 15% deposit with a Halifax new build rate and the full mortgage app submitted. Now they have come back saying subject to a valuation 20% deposit required and my advisor believes it's down to them viewing the property as a high risk..its a section 106 discounted scheme . It's a joke, you get a government scheme to make the house 'affordable', but then a huge deposit is required as a lender views it as high risk.

If, further deposit can be raised...I wonder if the decision is going to be positive one following on from this requirement ...?

ShawUK

The_Humph wrote: »

So my DIP was successful, 85%ltv, 15% deposit with a Halifax new build rate and the full mortgage app submitted. Now they have come back saying subject to a valuation 20% deposit required and my advisor believes it's down to them viewing the property as a high risk..its a section 106 discounted scheme . It's a joke, you get a government scheme to make the house 'affordable', but then a huge deposit is required as a lender views it as high risk.

If, further deposit can be raised...I wonder if the decision is going to be positive one following on from this requirement ...?

Sorry to hear that. I'm literally waiting to hear back from nationwide on a new build full application.. Hopefully nationwide aren't as ridiculous

kingstreet

Halifax usually lends only upto 80% on newbuilds. The S106 makes no difference.

There is a panel of around twenty builders allowed upto 95% on newbuilds, but I don't think S106 is included in that.

Are you sure your broker entered it as a newbuild in the first place?

Which builder?

The_Humph

I'm told only 4 lenders deal with S106 , and it certaintly doesn't sound like it was a question, or keyed in at Dip stage!
Builder is Cala.

kingstreet

Newbuild isn't entered at DIP stage, so you are reliant on the broker knowing the criteria. You have to phone through after submitting the application to tell them about the S106 agreement.

Cala is on the Halifax top twenty builders list, so it would be possible to borrow more than 80%, if that extends to S106 property.

I'm sorry, I don't know if that is possible as our Halifax top twenty builders don't offer S106 property.

The_Humph

Halifax deal with S106 but want more deposit now the app submitted. They did the same I've just found out to my brother who has also bought a new build, via help to buy, and asked for more deposit. It seems it is the new build element that makes them only lend upto 80%. I feel like I've been lend up the garden path somewhat!

kingstreet

The_Humph wrote: »

It seems it is the new build element that makes them only lend upto 80%

That's right, except for "normal" (non S106) purchases from one of the top twenty, then you can go to 95% as mentioned.

silvercar

Can you find the extra 5%?