First Time Buying

[J3OEF]

Hi,

 

I have today been looking at a new build house with my partner built by Bardsley construction, its a 3 Bed House situated at the end of a line of 4 so a semi you could say. Last week i was speaking to the guy and he had 8, this week i went and there is only 3 left, they have reduced the price for £149,950 to £139,950 now and today he told me that its quite simply really to get the process started as they do everything and i dont do nothing really, its only when you buying via yourself that you have to get solicitors and so on to get the process going and completed.

 

Anyway the house is nice and he has told me that we can if we wanted to depending on if we could get one can mortgage it at £139,950 then take away £10,000 which they will give us 1% stamp duty, 5% deposit paid, Legal fees paid and one months towards stat bills totally £500. He also said max time for a mortgage was 35 years and it does not really matter how long its over. Does anyone know what sort of interest rates would be added onto a mortgage like this?

 

£129,950 / 35 Years = £3712.85 Per Year

 

£3712.85 / 12 Months = £309.40 Per Month

 

so that means that the mortgage would cost £309.40 per month with interest on top? or am i wrong? even with 20% interest ontop of this its only £371.28 so im confused as this seems cheap for a mortgage?

 

Obviously if you add on home insurance and all that then it will go up. But because its a new build everything is covered for 2 years so it does not come into play really but when it does whats the rough price for home insurance etc?

 

Finally, am i right in saying that it would be how i worked out at £309.40 with interest added on top? And in 3 years could i sell, hopefully make a profit and then pay off the mortgage and use the profit to put down as a deposit on for exampe a better house?

[Ell-enn]

Hi there, depending on the interest rate you get - you could be looking at £700+ per month.

 

There is a good mortgage payment calculator on the BBC website here: BBC - Homes - Property - Mortgage calculator

 

Kind Regards

 

Ell-enn

[mrsc]

Hi

 

Don't want to spoil it for you but think that you would be about double that payments.

There are mortgage calculators on the web

[J3OEF]

i dont think that, im just doing basic maths, if its double that per month then it would be for example £10,500 interest? how is the interest calculated? as a whole ontop of £130,000 or monthly?

[Ell-enn]

It all depends on the interest rate you get... you really need to talk to a broker who will shop around for the best rate for you - 6% would make payments approx £747 on repayment mortgage and £650 on interest only.

[J3OEF]

so its now done on a whole then i.e £129,950 plus 10% interest, its done on per month or year?

[Ell-enn]

Hi, as I said it all depends on the interest rate and also the type of mortgage.

 

Have a look here for more detailed information: Mortgages Guide | Mortgage Advice | Types - Yahoo! Finance UK

 

Kind Regards

 

Ell-enn

[nuke em]

All construction properties are overpriced !Go to local estate agent(s), explain that you already "own" the property, ask them what it would be worth as a resale, ie you want to put it on the market now.If they cant show you its worth £140k then you are paying too much for it, new or not

 

However, If you "must" go ahead with this purchase try this :

 

Agree to buy the property at £139,950 however you want £8900 cash back at completion which will pay your Stamp duty which will be £1400,& your 5% deposit (£7000) , + £ 500 for legal fees, leaving you needing a 95% mortgage plus you and you want them to pay you £250 per month for the first 12 months ( this wil help towards your monthly payments)

 

95% Mortgage on £139,950 is you needing to borrow £132,952 which at 6% interest rate is £866.69 on a 25 year repayment mortgage or £664.76 interest only

 

How much do you (and your partner, if buying jointly) take home?

[Mrsmancmonkey]

Just to put food to thought, we are in the process of buying a new build and most lenders will only accept 5% as a maximum incentive from a developer so I would get this checked out with your broker. This includes your stamp duty, legal fees etc, any thing above that 5% incentive will most probably come from your pocket as it is us.

 

We have looked at quite a few lenders and it appears some are sticking to their guns with this at the moment.

 

We have had to get the purchase price reduced (taking into consideration stamp and legal fees and a cashback incentive)

 

Just something to make sure you ask about as we are now having to find extra money which we hadnt thought about

 

Good look with your move

 

x

[nuke em]

The "rule of thumb" that developers look at when building properties are these

 

a) Aquasistion cost of the land 40%

b) Development/Build/marketing costs 40%

c) Profit 20% ( this is min, on flats the profit figure is higher because the constructions costs are less)

 

so on a new build which they are marketing it at £150,000. approx £30,000 is gross profit - bear that in mind when negotiating with them.

ie £125,000 ish is the price you should look to pay on an asking price of £150,000

[rory32]

This may be of absolutely no relevance to your situation but if you're buying a property in an area designated by the government as 'disadvantaged', you don't pay any Stamp Duty Land Tax if the purchase price is £150,000 or less. More information is here HM Revenue & Customs:Stamp Taxes -