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Best LTV interest only mortgage? new build

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  • Best LTV interest only mortgage? new build

    We are currently buying a new build for the following

    purchased for £189,000, with 5% discount/deposit from sellers.

    We have 10% £18k
    And we are receiving 10% shared equity at 0% for 5 years.

    We ideally want to have an interest only mortgage, but have been told that Halifax wont accept the 10% shared equity loan as part of the 25% and would only value the property at £180,000

    is there any mortgages on the market that can offer this? we have looked at both halifax and nationwide. Both have a clause which prevents us from having ITO.

    Your feedback is greatly appreciated.

    TOM

  • #2
    Re: Best LTV interest only mortgage? new build

    Hi Tom

    Which scheme is it you're doing?

    Dan
    Free Guides For First Time Buyers!

    www.FirstTimeBuyerGuru.com

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    • #3
      Re: Best LTV interest only mortgage? new build

      Hi

      Its the scheme mentioned above, our mortgage advisor has told us it cant be done.

      I was wondering if anyone else has some views on this and maybe could help on the matter.

      An interest only mortgage would benefit us. On a new build these mortgage companies apparently want to see 20% deposit or 25% for Interest only. The 20% "interest only option" has to be your 'own funds' and with either lender cant be you cant have a gifted deposit or a shared equity of 10%.

      I didn't know if there is a mortgage out there which will allow interest only regardless of how the mortgage shows??

      please see previous post to see how we are working the deposit out.

      regards
      Tom

      Comment


      • #4
        Re: Best LTV interest only mortgage? new build

        Hi TomDickandHarry

        Im sure you've already thought of this, but is there no way you would consider getting a capital repayment mortgage? Do you have any direct debits or savings that could be replaced with paying that 200 - 300 more every month?

        You'll find it so much easier to find a mortgage, and you'll know that you're paying down your mortgage every month.

        Unfortunately newbuild properties are notorious for losing value rather quickly in any downturn, and so lenders are very hesitant to lend to first time buyers at such a high Loan To Value for an interest only deal.

        In fact Halifax has just started demanding proof in the form of things like cash ISA statements for how you'll eventually repay the mortgage on interest only deals. Unfortunately the future of interest only is in doubt.

        Dan
        Free Guides For First Time Buyers!

        www.FirstTimeBuyerGuru.com

        Comment

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