Urgent Urgent Shared Ownership Mortgate Advised Required!!

sbs2lc1

Hi,

I am i was in the process of purchasing a 2 bedroom shared ownership appartment in london. And i was going throught the mortgage application with one building society They gave me a 'certificate' saying we can lend u X amount, and they gave me a key facts illustrated, and i reserved the product. And i signed the application form which they sent off to head office ( i don't have copy). I paid the survance fee and was waiting for the mortgage to go through.

However, i recieved a call yesterday morning from the building society saying that basically after surveying the property they are only prepapred to lend me 75% of property value as they value it on its resale value not as a new build flat. And they said i need to put down around 30k deposit, i clearly don't have this and they said well unfortunately you can not have the mortgage with us. ARE THEY ALOWWED TO DO THIS? From the outset i agreed to only put down 10% and i made this clear from the begining, however just yesterday they changed it to 30%.

Also i contacted this IFA which the housing association recommended and he keeps offering me rates which are not the lowest or most competitive in the market! WOULD ANYBODY KNOW THE 5 OR SO BANKS/BUILDING SOCIETIES THAT DO SHARED OWNERSHIP, SO I COULD CONTACT THEM PLEASE.

Any advise and help would be greatly appreciated....

In addition my solicitor, is trying to charge me 100 pound for fees. Let me explain, i agreed to buy flat 29 then moved to 35, the floor above he said basically that i have to pay for the work carried out on the flat 29, even though when i called him and explained i wsa changning flat he did not advise me of this. ANY THOUGHTS WOULD BE APPRECIATED.

thxs
sbs2lc1

tinkerbell84

Abbey do shared ownership mortgages

You can't go by market rates, by the way. Shared ownership mortgages cost more than normal mortgages.

For example, I'm getting a 10 year fixed rate mortgage at 5.49% just now. My friend is getting a shared ownership mortgage which is a rate of 5.67% fixed for just 2 years.

dmg24

I think the issue here is that it is a new build apartment, not that it is SO. Many lenders will now only lend up to 75% on such properties.

Was the lender aware that it was a new build apartment prior to the survey?

The lender can change their terms at any time until the mortgage offer is signed. However I would question whether it was fair to allow you to pay for the survey if they were already aware that they would not lend 90%.

mpsavuk

Kent Reliance used to do SO mortgages. Have a look at their website.

dmitch071

Nationwide

inch_high

Depends what the purchase price is. If for example, the purchase price is £100k and your putting £10k down and want to borrow £90k that might be ok with them (if they have maximum 75% LTV on shared ownership they should have told you this and declined your app before you paid the valuation fee).

But if the then go and value the property and they think its worth £80k (irrespective of the purchase price) and youre only putting £10k down, then they arent going to lend you £90k on a property they think is only worth £80k, so (assuming they'll lend max 90%) they'd tell you that you'd need to put £28k down (to make the loan £72k against value of £80k = 90%)

tinkerbell84 wrote: »

Abbey do shared ownership mortgages

You can't go by market rates, by the way. Shared ownership mortgages cost more than normal mortgages.

For example, I'm getting a 10 year fixed rate mortgage at 5.49% just now. My friend is getting a shared ownership mortgage which is a rate of 5.67% fixed for just 2 years.

They dont cost any different with the Halifax...

Where have you got a that 10yr fixed from? Must have cost a few quid!

tinkerbell84

inch_high wrote: »

They dont cost any different with the Halifax...

Where have you got a that 10yr fixed from? Must have cost a few quid!

First direct. Fees are only 697. Booked in April for October drawdown.

I believe it's now 6.29% and 1500 in fees :eek: :eek:

jill2002

Abbey Shared Ownership mortgages are on the same deals as any other residential mortgage (except Flexible Mortgages). If you applied through Abbey for a mortgage a couple of months ago, they changed their terms to 75% max loan to value on new build flats. I am guessing that if it was Abbey, you fell in between the time they were changing and therefore, application was done and by the time the valuation was done, the terms had changed. It's unfortunate, but they can change the terms at any time until you have received the formal offer, they would honour it (until the completion deadline of the product).

I guess your best course of action would be to get in touch with a whole of market broker to see if they can search the lenders for you. Or get a loan to cover the rest of the deposit?

sbs2lc1

Hi

THANK YOU EVERYONE FOR YOUR ADVISE!! - - The best fixed rate i seem to be able to get is 6.85% fixed for 3 yrs, COSTS are 500 arrangement, and 430 valuation. Does anyone think i cud get a better rate??

YET AGAIN THANKS FOR ALL ADVISE

Bargain_Rzl

Re: higher interest rates on SO mortgages, this is not my experience. The only way in which SO mortgages differ from any other is that only certain lenders will deal with them in the first place. Once you've filtered those that won't do so out of your list, you should be left with exactly the same selection of mortgage products and rates as anybody else (including several prime high-street lenders).

As others have said, your problem would seem to have been caused by the property being overpriced in the first place, not by it being shared ownership. And as newbuilds always lose value initially (except in a rapidly inflating market) your lender would be foolish not to take this into account. As would you, unless you want to get into negative equity from the word go.

I hope it all works out for you one way or the other.

Edited to say: forgot to mention my mortgage is with Nationwide, also on a newbuild shared ownership flat in London, and while I got a loan of about 88% LTV 18 months ago, I am working on overpaying to get my outstanding balance down to 75% LTV of original purchase price by the end of this year, as I do not anticipate being accepted onto a good new fixed/tracker deal without a lower LTV.

Conrad

That rate you quote of 6.85% is only the beginning. SO is difficult to place and you may well find the lender in mind also declines the case.

As for Solicitors work, would you come to my house and do some decorating and then just because I move to the house next door I'll say I dont want to pay you for your time!