New Build - Without selling prior?

Hawkz

Hi all,

Newbie here. I’m a first time buyer though my partner owns a property (flat) and has approx. £35-40k in equity which basically leaves half the property value to be paid (approx 80k purchase price few years ago).

Due to a family bereavement I have been informed as a beneficiary I’m due to be given a total sum which almost equates, once combined with her equity to buy the entire property outright. Though my intention is to ideally match her deposit and therefore acquire a 75% or less LTV mortgage.

I spoke with a new build developer who explained their process around their usual process of my partner putting her flat for sale and having an offer etc. That all makes sense. However, they’re apparently selling 9 months in advance off-plan so realistically whoever bought her property would be waiting a long time unless we moved prior or reduced her asking price to equate for this. As it’s 9 months prior they stated part-ex and other options are only a solution when the lead-time is 6 months not 9. Due to certain accessibility requirements it would likely be difficult to find suitable rented accommodation for the interim period as her current property has been adjusted for her needs.

Does anyone have any suggestions, ideally we’d just sell her flat closer to the time as the property seems to be in a desirable area, so therefore we wouldn’t own 2 properties at once. I am willing to use my deposit to cover the ‘exchange deposit’ if necessary or likely acceptable. Though appreciate this likely goes down a “2 house” ownership route until the other is sold (including additional reclaimable 3% tax).

Would a mortgage advisor be best placed to review and suggest a solution, if one exists or is there someone else better placed?

eddddy

It's a bit difficult to follow what your saying. Is it roughly this:

• You and your partner want to jointly buy a new build property - with a 75% ltv mortgage
• You are expecting an inheritance 
• You will use the inheritance to pay off your partner's current mortgage and for the 25% deposit on the new build

If the above is correct, then...

• The new build developer might not take you seriously, until you have the inheritance money in your bank account. (You certainly shouldn't exchange contracts until the inheritance money is in your bank account).
• You and your partner would need to pass the affordability tests for the 75% ltv mortgage (based on your incomes, outgoings etc)

.... but if you're not intending to pay off your partner's current mortgage, it's probably going to be more difficult. She would have 2 mortgages at the same time. So she would have to pass an affordability test for 2 mortgages. And 'standard' residential mortgages are for your main home - your partner cannot have 2 main homes at the same time. You might have to find something like a 'second home mortgage' - which might be more expensive.

Hawkz

eddddy said:

It's a bit difficult to follow what your saying. Is it roughly this:

• You and your partner want to jointly buy a new build property - with a 75% ltv mortgage
• You are expecting an inheritance 
• You will use the inheritance to pay off your partner's current mortgage and for the 25% deposit on the new build

If the above is correct, then...

• The new build developer might not take you seriously, until you have the inheritance money in your bank account. (You certainly shouldn't exchange contracts until the inheritance money is in your bank account).
• You and your partner would need to pass the affordability tests for the 75% ltv mortgage (based on your incomes, outgoings etc)

.... but if you're not intending to pay off your partner's current mortgage, it's probably going to be more difficult. She would have 2 mortgages at the same time. So she would have to pass an affordability test for 2 mortgages. And 'standard' residential mortgages are for your main home - your partner cannot have 2 main homes at the same time. You might have to find something like a 'second home mortgage' - which might be more expensive.

Thanks for the response. Apologies for the convoluted explanation! Your assumptions are correct, except paying my partners mortgage - I hadn’t considered this as an option as she is the only one listed on deeds.

I thought I’d scope the options available prior to any inheritance being in my account, as understandably most developers likely wouldn’t accept it until they saw proof of the funds in an account.

Based on incomes/outgoings etc without going through the whole MIP & being accepted it does seem to provisionally suggest we’d be OK for the 75% LTV though this didn’t consider keeping her existing property.

It sounds like either an existing home or not having two mortgages, or selling the flat first prior which seems to be the norm are likely the only options available. Greatly appreciate your response!

kingstreet

Without the accessible funds and a buyer for the other property, you aren't in a proceedable position. If you went into an EA and made an offer, they would say the same thing. You need to be SSTC first.