Any advice helpful

superowls

Hi,

First time here, we are currently looking for a mortgage for a new build house which we have received a great deal from the builders, the list price of the house is £117,000 although we would receive a £17,000 discount, plus the builders would pay 5% deposit on the home with regards to the mortgage. All this is dependant on us reserving the house before the end of the week and as such this is a little bit of a rush.

We have a mortgage advisor in place and he has sorted us out with a mortgage, although he does not believe us with regards to how much discount we would receive and is waiting to check this out.

The other problem is that on any mortgage quote that he has gained for us he has only valued the house at £105000 as he believes the cost to us would be £100000 (5% deposit paid in the discount).

He has also recommended a mortgage with the Halifax which seems to be the best deal interest rate wise, although as he is only valuing the house at £105000 and then saying the house is being bought (mortgage required) for £100000 this seems to fall into the <90% loan and so is being charged a higher lending fee.

Basically what i am asking for is advice with regards to the High Lending Charge, if as i am certain the house is worth £117000 and we only want to lend £95000 would we still be falling into the higher lending charge bracket as we are only required to lend 81% of the total value of the home.

Sorry it is a long one but i thought i would detail the history.

Many thanks in advance.

immy

i am pretty sure the mortgage company, will want to know what you EXACTLY paid for the house, and use that as the value of the house.

If the builder is giving you 17k discount its because its overpriced and he wants rid of it.

Rob_D

On the motley fool podcast for the 26th of March, the head of Bradford and Bingley buy-to-let mortgages said that for new build homes (where the discount schemes are complex) they work on the price that was paid for the house for calculating loan to value ratio.

Rob

SWMBO

Hi...

"All this is dependant on us reserving the house before the end of the week and as such this is a little bit of a rush."

Is there a queue for people buying this or is it actually a stated deadline in their literature or are they pushing you into the sale....Sounds like they're desperate and you could take a little longer/negotiate a bit more off anyway...they could be sitting on this for weeks if they're not careful with the price slipping further.....just saying, be a bit canny if you can and be prepared to walk away to see if you can save some more.

Griptool

superowls wrote: »

Hi,

First time here, we are currently looking for a mortgage for a new build house which we have received a great deal (:rotfl:)from the builders, the list price of the house is £117,000 although we would receive a £17,000 discount, plus the builders would pay 5% deposit on the home.........

Many thanks in advance.

All developers are desperate to shift houses at the moment - its not a discount and its not a gifted deposit the price you pay is the current market value, just like a DFS its a marketing ploy to suck in the gullible.

Don't rush into anything - don't let the developer bully you into buying before you're ready and don't be surprised if you're in negative equity in six months.

Buy a house in haste, repent at leisure.

JimmyTheWig

The house (like anything else) is only worth what people will pay for it.
If they could sell it for 117, why would they be selling it to you for 100?

The answer is they can't sell it for 117, and so it isn't worth 117.

I believe that they are allowed to give you a 5% discount with regards to valuations but nothing more. Therefore if you are paying 100 for it, the most they can put the value down as is just over 105 (technically, I guess, £105,263). Which means you need a 95% mortgage.