Two FTB's starting the journey to a Mortgage - what can you advise us?

Charliewashere

This is going to be a fairly personalised post, sorry. Just about who we are - me and my partner are first time buyers (22F, 25M), we both have HTB ISA's and we're looking to buy a house late this year, around the £245,000 mark, with a 5% deposit including the HTB bonus. We have spoken to a mortgage advisor from Lloyds who completed an AIP with us and we are happy with the outcome - we were graded A1 in their credit check, but the amount is too low as our salaries haven't increased yet. We are both due pay increases in the coming couple of months which should allow us to borrow the amount we need.

I have been looking at mortgages with Nationwide. Their rates look to be lower/cheaper and they seem more FTB friendly. A question from here, what is the likelihood of a 5% deposit mortgage as FTBs getting accepted with a house value of £245k, or do you guys need to know more information?

I am in contact with a building developer (Durkan Homes) who have plans to construct new houses in our area that we like the look of. We have been added to their enquiry list for further updates. How competitive is the notion of buying new developments? And at what stage of the building process do the houses usually go on sale?

There sure is a lot to think about here! Does anyone have answers to the questions and/or give us some guidance? Hopefully this thread can be resourceful for others at a similar point!

Snookie12cat

The only problem I see with your plan is very few lenders will give you 95% mortgages on new builds. Most lenders will restrict borrowing on these. I am sure nationwide will not 

Slithery

You've left out the most important detail.....

How much do you earn?

Charliewashere

Snookie12cat said:

The only problem I see with your plan is very few lenders will give you 95% mortgages on new builds. Most lenders will restrict borrowing on these. I am sure nationwide will not 

This was a concern too, but I found that Nationwide have recently started supporting 95% LTV mortgages on new builds which was fantastic to learn.

Charliewashere

Slithery said:

You've left out the most important detail.....

How much do you earn?

I knew there was something! £50,150 combined salary and is due to go up slightly

dimbo61

We are now in March and you can pay upto £4,000 into a LISA each 
You can then save another £4,000 each in April.
With the government bonus of £1,000 each for this tax year and next you have £20,000 which is a very good start towards the £25,000 you need for a 10% deposit.
So now is the time to get the 2X £4,000 into a LISA ISA 
Bank of Mum and Dad maybe

The 25% bonus is too good to miss if at all possible 
Transfer the money from the HTB ISA,s 

PS you need to have the LISA for 12 months !!!

kingstreet

Nationwide will only go to 95% on a newbuild using Deposit Unlock;-

https://www.nationwide-intermediary.co.uk/lending-criteria/new-build-hub#deposit-unlock

Otherwise it's 75% max on a newbuild flat and 85% max on a newbuild house (upto £750k).

AFAIK Lloyds follows Halifax and will also limit newbuild loan to value to 85%. Certain brokers/builders do have access to 90% products from Halifax.

Charliewashere

kingstreet said:

Nationwide will only go to 95% on a newbuild using Deposit Unlock;

Otherwise it's 75% max on a newbuild flat and 85% max on a newbuild house (upto £750k).

AFAIK Lloyds follows Halifax and will also limit newbuild loan to value to 85%. Certain brokers/builders do have access to 90% products from Halifax.

Bum. Durkan Homes isn't on the list of participating builders - that was a large oversight. Thanks for pointing it out

youth_leader

Thanks for posting that Dimbo61, my son has been dithering over where to put a small lump sum I've given him.

Hedgepigs

Also bare in mind the HTB ISA bonus is paid on completion, so won't be available for your exchange deposit, only mortgage deposit. You can of course use the ISA funds as exchange deposit, as you close your account prior to exchange.

Charliewashere

Hedgepigs said:

Also bare in mind the HTB ISA bonus is paid on completion, so won't be available for your exchange deposit, only mortgage deposit. You can of course use the ISA funds as exchange deposit, as you close your account prior to exchange.

I've not really dived into exchange deposits so I don't know much, thanks for raising it. £12.5k makes our 5% deposit which includes the 25% bonus. I have not taken into account the exchange deposit, will this affect the outcome?