My situation

jhyt89

I've done a bit of reading and now am slightly worried.

My situation is that I have bought a new build property off a third party and not the developer (ie. a resale). Am I able to obtain a mortgage on this? I have read that lenders do not like to lend in this situation?

kingstreet

Many lenders will continue to treat it as a newbuild if it's less than two years old and/or it hasn't been lived in. That will mean a lower max LTV.

Make sure it has the necessary warranty - NHBC, Zurich etc.

libf

You've already bought without a mortgage and now you want one? Or you have offered and are now looking for a mortgage to complete the purchase?

jhyt89

libf wrote: »

You've already bought without a mortgage and now you want one? Or you have offered and are now looking for a mortgage to complete the purchase?

The deposit was paid by the third party originally to the developer.

I have paid the third party the deposit and the deed assigned to myself, and need a mortgage for completion.

jhyt89

kingstreet wrote: »

Many lenders will continue to treat it as a newbuild if it's less than two years old and/or it hasn't been lived in. That will mean a lower max LTV.

Make sure it has the necessary warranty - NHBC, Zurich etc.

It's not completed yet, due to complete in Jan 2016. Has 10 years NHBC. But I have read that lenders don't like lending to resales

libf

If the property has not yet been registered then it's not a resale. You will be the first registered owner, regardless of tooing and froing with the deposit.

kingstreet

That's not a resale, that's a sub-sale.

You are correct. Lenders don't like it.

Find a good broker to suggest a solution. It's not your fault, but "buyers" aren't supposed to use house purchase contracts as a hedge they can use to make a profit.

Everything is commodified these days... :mad:

jhyt89

''A sub-sale occurs when a property is bought and then sold on within six months, i.e. the borrower is buying the property from someone who has themselves bought the property less than six months before. The date of registration at the Land Registry is how we determine the length of ownership.''

Not sure my case is a sub-sale as the seller had 'bought' the property in march 2014, and I 'bought' the property in Jan 2015, which is more than 6 months?

I'm getting a bit worried now!

libf

How did they buy it in 2014 but it won't be finished until 2016?!

jhyt89

libf wrote: »

How did they buy it in 2014 but it won't be finished until 2016?!

Most new developments take a few years to build these days! And investors from abroad (Asia) are given first dibs into buying apartments. So he bought it in Feb 2014, way before any of the apartments were made available in England.

libf

When you say he paid a deposit... Do you mean deposit as in 10% of the whole property price or a reservation fee of £500/£1000 pounds?

If he's just transferred his reservation to you then I don't even see how the mortgage company would know... (Although I'm no expert.)

My experience of new builds I'd releasing them 9 months in advance. Possibly a year...