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i have had an offer accepted on a new house of £330,000 but i cant get a 90% LTV mortgage because its a new build.

by kevin007 03 March 2010 |

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i can get a 80% ltv mortgage but that means me tying up another £33,000 of my savings. any advice would be greatful
THIS IS MY 1st POST WHOoo

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manzanilla posted
Well done on first post :)
To point out the bleedin' obvious you have to choose between
a) pulling out of the purchase and finding somewhere else
b) going back and offering say £10 or £15k less
c) accepting that it will take up a lot of your savings
d) hunting around for other mortgage offers, which may not be succesful.
It all depends on how much you want THIS particular house! Getting a 80% ltv mortgage will also mean that you are paying a lower mortgage rate, so the extra 33k capital will be getting a return.
manzanilla
Posted on 03 March 2010 | Love 1 love Report
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Swarbs posted
Lenders are increasingly offering lowers LTVs on new build houses and flats. This is because the price of a new build will typically drop by 10% as soon as someone moves in because it's no longer 'new'. It's a similar principle to the value of a new car dropping sharply as soon as it is driven out of the dealer. With the property market still very uncertain, most lenders aren't willing to risk lending above 80% on new builds and those that are will probably have higher rates.
Have you tried negotiating with the company selling the house? If you are having trouble raising a mortgage, it is likely that everyone else is as well. Use this to your advantage and try to get 10% off the asking price. This is a particularly good tactic if most of the other homes in the development have been sold - the developer just wants to get the rest of them sold asap so they can shut down their sales operation for this development to save the costs and move onto their next project. The lack of 90% mortgages is just a good excuse to try and push the price down some more.
Posted on 03 March 2010 | Love 0 loves Report
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MikeGG1 posted
Kevin
If there is a new build premium of, say, 10%, which is quite normal, it means that the lender will consider it as a 0% deposit. Their minimum is 10%, so they will be thinking in terms of 20% deposit and applying the 10% interest rate, 25% becomes 15% etc.
It is not just your creditworthiness, it is also what they are likely to get back if you do default. Not that I expect you would, of course. It is how they are think since the crash.
Mike
Posted on 03 March 2010 | Love 0 loves Report