Non-Completion Nightmare

Leon_W

I was looking at Persimmons results this morning. Turnover and sales slightly down but they made a record profit.

Now, the profit works out at about 20% by value of every new home they have sold, so if we are being very simplistic, new homes HAVE to be overvalued by 20% to allow for a profit not accounted for with a second hand purchase.

Regards

IsThatTheTime??

Thanks all for your comments.

I don't blame my solicitor, I understood the necessity of having a mortgage and the reasons an offer wouldn't stand. I have a multi-buy to let product and hadn't had this problem before so assumed it would be straightforward this time. This is my fault, I relied too heavily on this assumption. I am hoping that I will still be able to find a mortgage, as defaulting is to be avoided at all costs.

Silvercar, your suggestion of using a bridging loan is a way out I hadn't thought of that, thanks. Can anyone see any problems with this?

Loopy, unfortunately the builder (Persimmon) won't allow me to assign the contract. I checked that before signing, so went in with my eyes open, but it does seem a bit tough.

Caveat Emptor, indeed.

The broker who originally got me the mortgage deal is no longer in business (I don't know why). Any tips for finding a good broker? Is there any reason I shouldn't get several brokers on the task at the same time or would that be a waste of time? Logic suggests finding a local one. I've noticed some mortgages have long tie-ins with 5% redemption penalites - well worth avoiding! Apart from those I'm thinking of working out the actual cost over a year on the hunch (OK hope) that prices will have stabilised. I factored in having to hold onto the property for that amount of time anyway.

ixwood

You're asking for the right answer to the wrong question IMO.

I think you should aim to get out as cheaply as possible, rather than how to somehow buy the obviously unaffordable and very likely overpriced property. Cut your losses and get out of there. I doubt your liability is really 200k.

Bridging would cost a fortune. Might be digging a bigger hole.

silvercar

Dunstonh wrote:

By imaginative, you dont mean the type that can get the borrowing with a few "white lies" do you?

I meant "imaginative" as in bridging + remortgage a day later, so OP only has to satisfy remortgage conditions rather than new-build new mortgage or a BTS mortgage rather than BTL.

If so, herein lies the problem. Are they really helping or creating a problem?

OP already has a problem.

I wasn't thinking of lie-to-buy, though moving into the property is another option to consider.

If the builder won't allow assigning the contract he couldn't actually stop you marketing the property as a resale.

Could your solicitor put pressure on the builder to allow the contract to be assigned.

Another option may be to remortgage your home (or other assets) to gain some equity so you can get a lower mortgage on this one.

dunstonh

Leon_W wrote: »

I was looking at Persimmons results this morning. Turnover and sales slightly down but they made a record profit.

Now, the profit works out at about 20% by value of every new home they have sold, so if we are being very simplistic, new homes HAVE to be overvalued by 20% to allow for a profit not accounted for with a second hand purchase.

Regards

Profit was high due to cost cutting.

Dan_Collins_2

Some lender are wise to the quick turn around and will not remortgage you for at least 3 months.