New build - 11.5% builder's incentive - struggling to get a mortgage

BelowTheLine

I own a couple of rental properties - both houses, freehold, non new-build, owned through a ltd co..

I'm now hoping to buy a 200k btl new build flat in Manchester for which I'm looking for a 75% LTV mortgage (ideally, but could go all the way down to 60% if required) .

The broker I usually use is struggling (and almost given up, though he is loath to say so!) to get a suitable lender due to a builder incentive of 11.5% (stamp duty + cashback). I did my best to get the builder to knock some of it off the price but he is not willing to budge on that.

I can see why lenders would look askance at such a high %, but is there any hope at all? Is it just that my broker doesn't have enough experience/knowledge or is it just not possible to place?

foxy-stoat

BelowTheLine wrote: »

I did my best to get the builder to knock some of it off the price but he is not willing to budge on that.

Why not just ask for less of an incentive, keep the price the same.

Thrugelmir

Bide your time. The developer may well struggle to sell in such circumstances.

BelowTheLine

My broker says he's struggling because it's above 5%. I can't afford to forego 6.5% unfortunately as the ROI wouldn't stack up.

foxy-stoat wrote: »

Why not just ask for less of an incentive, keep the price the same.

BelowTheLine

That could well be the case. I just need to be sure that it's not my broker just being incompetent, he's been sitting on it since Monday but isn't giving me a clear answer when I ask him to confirm that he can't help.

I've never bought a new-build so I don't have any experience on how these things work. I just can't understand why he can't just knock some/all of the "incentive" off the price!

Thrugelmir wrote: »

Bide your time. The developer may well struggle to sell in such circumstances.

Retired_Mortgage_Adviser

Are you sure that's the only complication?

It should not be too much work to find a lender who will accept such an incentive with the proviso that anything over x% (say 5%) will be deducted from the "purchase price"of 200k to determine the net purchase price, based on which they will lend. So the loan amount will go down but it shouldn't affect you based on what you have said.

If he's been sitting on it for a few days now and refusing to give up, you are within your rights to get a second opinion, preferably from a broker who specialises in new builds.

BelowTheLine

That's what he says!

I will give him until the end of the week and get in touch with another broker on Monday.

Retired_Mortgage_Adviser wrote: »

Are you sure that's the only complication?

ACG

Buy to lets are not really my thing but it probably just needs restructuring on paper as Retired Mortgage Advisor says to get it over the line.

BelowTheLine

My adviser (bless him) finally found a suitable lender (Precise) but I broke his heart by answering yes to whether the discount/incentive/whatever is conditioned upon going through a paid property finding service, which it is! Apparently Precise will decline if that is the case

Unfortunately he did not ask about this before today and I did not think it was relevant. More fool me.

Thank you for the couple of broker recommendations on PM, I will contact them on Monday. I think this may be beyond his capabilities. Hopefully I will have better luck next week.