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Mortgage on a New Build
Johnnygb78
Posts: 5 Forumite
Afternoon, does anyone know the answer to this example?
You agree to buy a new build property £180k, you plan to fund the purchase with a mortgage for 95% and 5% savings. Come completion time you pay the builder the £180k. What if during the construction time the market continues to grow rapidly and the building is now valued at £213k.
You still pay the builder the £180k (£171k mortgage, £9k savings) as that is the agreed purchase price.
However, is the lender obliged to offer you a different mortgage product since the LTV has changed from 95% (£171k/£180k) to 80% (£171k/£213k)?
Thanks
You agree to buy a new build property £180k, you plan to fund the purchase with a mortgage for 95% and 5% savings. Come completion time you pay the builder the £180k. What if during the construction time the market continues to grow rapidly and the building is now valued at £213k.
You still pay the builder the £180k (£171k mortgage, £9k savings) as that is the agreed purchase price.
However, is the lender obliged to offer you a different mortgage product since the LTV has changed from 95% (£171k/£180k) to 80% (£171k/£213k)?
Thanks
0
Comments
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No. They will lend on the price paid. The £213k is an estimate, the £180k is real. When you remortgage after 2 years though, then you could use a currest estimate (because there is no real figure).0
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Valuation or purchase price, whichever is the lower.
You using HTB - Mortgage Guarantee to get 95% on a newbuild?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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