PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Help to Buy Undervalued

Options
I am purchasing a help to buy property with purchase price of 145k.
The banks valuer came back with 135k.
I am using the HTB scheme and 5% deposit.
My mortgage advisor told me that if the valuation comes back under, then I’m basically screwed.
My question is: Does the HTB scheme count for the purchase price of the property or the actual valuation price of the property?
I already have the ATP (authority to proceed) from the HTB scheme for the full 145k purchase price.
Which means:
Purchase price 145k
5% Deposit 7250
15% gov 21750
Mortgage price 116k

So the bank are willing to give me a mortgage of 116k. Which is under their valuation of 135k.
Basically do I need to worry becuase I already have the ATP?
Is the bank trying to scare monger me so I get a bigger mortgage?
Does the HTB count for purchase price or valuation price?
(I havnt signed anything yet)
«134

Comments

  • nubbins
    nubbins Posts: 725 Forumite
    I would have thought you you need to find another 10k or find a lender/valuer that will value the property for 145k.
  • LittleFawn
    LittleFawn Posts: 22 Forumite
    Third Anniversary
    The builders have included an incentive worth around £3k.
    Which I didn’t actually ask for or need (okay so 2 TV’s are better than one but I already have all my stuff)
    I’m going to ask to have this taken off.
  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    so your buying an overpriced property, either you give the builder an option to reduce their price or you walk and remind them other buyer's will have the same problem if they need a mortgage
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • Gwendo40
    Gwendo40 Posts: 349 Forumite
    nubbins wrote: »
    I would have thought you you need to find another 10k or find a lender/valuer that will value the property for 145k.


    OR you ask the vendor to reduce the price accordingly.
  • HampshireH
    HampshireH Posts: 4,918 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    If it's an incentive worth 3k why would having it removed reduce the price? Or are you suggesting it will reduce the value?

    Sorry it's early & the brain probably hasn't woken up yet but incentives are usually freebies to get you to buy? If they aren't then you would have had to sign to confirm payment
  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    don't forget for a new build as soon as you step in, the house may drop further in value
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • Tiglet2
    Tiglet2 Posts: 2,662 Forumite
    Seventh Anniversary 1,000 Posts Photogenic Name Dropper
    My daughter is having this exact problem with HTB new build and a 5% deposit. Apparently us/in laws gifting an additional £10k to fill the gap is not sufficient. The lender has to value the property at the asking price. My daughter is now anxiously waiting for the outcome on her third lender's valuation. If this doesn't work, then she will have to find another cheaper "older" property without the HTB element. My heart bleeds for you - it seems that this so-called government help is no help whatsoever.
  • Sorry I do not know a lot about HTB but could you not just advise the seller to reduce the price as it is obviously not worth what it is being sold for? Happens with all properties not just HTB
  • Tiglet2
    Tiglet2 Posts: 2,662 Forumite
    Seventh Anniversary 1,000 Posts Photogenic Name Dropper
    Problem is that developers are reluctant to reduce their prices, especially when other plots have been sold at their inflated prices without any problems (maybe because the LTV is better on those properties, so lenders are not so jittery about getting their money back if the purchaser defaults). My daughter's developers have refused to reduce the price on her new build and, in fact where they are continuing onto Phase 2, the same house is now selling for more than hers is. Obviously on older properties the price is negotiable, but new builds rarely are. You may negotiate "extras" but it won't reduce the asking price.
  • LittleFawn
    LittleFawn Posts: 22 Forumite
    Third Anniversary
    I agree I don’t want to buy an over priced property but I thought 10k on a 145k flat is excessive.
    I think the incentive pack might have something to do with it. They insisted that it was included when I didn’t even know I was getting it. To be honest I don’t want it.
    I’ve phoned the builder and they said they would contact their head office but I’m just so scared I won’t get this.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.8K Banking & Borrowing
  • 253K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.8K Work, Benefits & Business
  • 598.6K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 257K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.