New Build Mortgage Problem

Queenie1992

Hello,
Me and my partner recently got a new build. When we went to a mortgage advisor he stated we could loan up to 136k before deposit. So we gave him the value of the house and stated there would be extra's eventually but that's the base value of the house.


The house was £130k and Barclays accepted us on a 2.18% at 90/10 LTV. So we had the 10% deposit. 

We got an upgraded kitchen and house extension which raised the cost to £137k. Now the mortgage advisor is refusing to play ball despite advising us it was fine and on top of that he says Barclays won't accept the kitchen part as it doesn't 'bring up the value of the house' is there anything I can do about this?

Is this even true and if not is there anywhere I can get this sorted like for example a better mortgage company? Really need any advice I can get!

Thanks everyone!

amnblog

This has little to do with the £136,000 maximum lending you were offered.
Barclays will lend you up to 90% of the purchase price or their valuation, whichever is lower.
Have you had a valuation completed? If so, regardless of any upgrades, your maximum lending will be 90% of the valuation figure is under (£137,000), not the purchase price.
Please note that 'upgrades' are often not reflected in the valuation figure.

Queenie1992

I don't remember any valuation done as the house isn't even completed. Can I get a valuation done independently and force them to accept it someway?

kingstreet

No. Before you get to valuation stage, as amn has said, the maximum mortgage is 90% of the agreed purchase price. That  figure is set out on your reservation. Any extras agreed after reservation are expected to be paid for by you. Where did you get your broker?

Queenie1992

Sadly recommended through family.
Is it possible to get mortgages for new builds with 95/5% LTV? Might have to change if it's possible.

Thrugelmir

Adding an upgraded kitchen at a cost of £7k doesn't increase the value of the property. Once installed it's just a kitchen.  Just like similar properties on the development with standard kitchens. 

kingstreet

Queenie1992 said:

Sadly recommended through family.
Is it possible to get mortgages for new builds with 95/5% LTV? Might have to change if it's possible.

There are one or two options in the market.

Carl2510

The kitchen should be paid out of your own pocket not added to the purchase price.

Queenie1992

Carl2510 said:

The kitchen should be paid out of your own pocket not added to the purchase price.

Ah yes as stated I was never made aware of that. However there's an extension that hadn't been covered by it either despite it clearly increasing the value (making it similar value to houses around us)