New build incentives

alfiemama

Hi ya

The only thing is its the mortgage company that we have a problem with as we still need to put 10% down, unless barrat can give us money in the hand to give to mortgage company then we are snookered.

dunstonh

Lenders are now switched on to builders deposits because all they were doing was increasing the price of the house and then paying a bit back and calling it a deposit.

Lenders ignored it in the days when property values went up but now that house prices have started going down and the biggest losers to date are new build purchases, they have tightened up.

Basically, the builder paying the deposit is a scam.

Even if you do get a lender to agree to accept it, the next problem is the valuer. He/she will go out and value it at market price, not the builders price. Again, because this is now more of an issue in the past, valuers are lowering the values on new builds so you will need even more of a deposit when the valuer comes in at 5-10% lower then the builders price.

Its just a sign of the times now that lenders are tightening up criteria and house prices are starting to fall. You dont want to be in negative equity as soon as you start.

alfiemama

You are so right, we have been told that, what I thought was all the other houses have probably been able to accept the discount of the house so the market value will be lower as they work on a comparrison in the area.
Need to get a higher offer or wait until March.
Thanks everyone some good ideas coming up though

wesmortgage

You get round this by buying house using another mortgage company for the purchas and using a product with no tie ins, you then use your current lender to remortgage the new build. This will work provided that your current lender will remortgage a property within 6 months of purchase which fewer companies are doing.

If not then rent out your old place and use a company to buy the new build that will accept the builders incentive, another one to remortgage it and go from there.

alfiemama

Hi Wesmortgage
Oh wish Id know this, had to let the buyer go, we are coming to the end of the tie in with mortgage and are still trying to move, going to pop house on the market again and take it from there,
thanks anyway

pinkshoes

Any building company who offers an "incentive" is probably only doing it because they're worried they're going to struggle to sell. Why can't you re-negotiate the price of the newbuild i.e. offer them £160k for it!

I'm a big believer in fate, so maybe this just wasn't meant to be! I'm sure you'll be able to find a buyer willing to pay a bit more for your house, and then you could rent for a while until you find the house of your dreams.

alfiemama

Hi Pinkshoes

Yeah thats exactly what we are going to do, just waiting to sell it so we can we rent for a while

adr0ck

can't you ask Barrett to knock 5% off their prices? (thats what their currently doing to their subbies and supply chain)

alfiemama

They were already knocking 14% off for us, but it was our mortgage company who we were tied in with until March who said you cant have over 5% as a new build incentive.
So we let the offer go and are now waiting for the mortgage to be up

terrierlady

Lenders are now switched on to builders deposits,TRUE!!!
Lenders ignored it in the days when property values went up but now that house prices have fallen watch out, especially buying new build.
Down valuations are happening every day on all developments.
Thats 100% whats going on and yes the valuers have been told, no new homes premium anymore, hence down valuations
We have to make sure all incentives have been shown and the limit seems to be 5% PERHAPS ONE BRAVE COMPANY WILL CHALLENGE THE RULE?:cool: