90% mortgage offer on new build flat
1.9% two-year fixed rate
£800,000 property value
Mortgage offer secured through panel-exclusive lender arrangement
Our client was a first-time buyer city professional wanting to secure the purchase of a new build flat valued at £800,000. He had a relatively small deposit available to buy a new build property so was seeking a 90% mortgage. The new property was in high demand, so he had to move quickly to secure his first home.
What was needed?
The client wanted to pay the reservation fee for the new build flat as soon as possible as he was in competition with others to purchase the flat. This meant he needed to move quickly to secure his mortgage offer on a new build flat. With this type of property it is no longer common for a lender to agree to a 90% mortgage especially at the level of borrowing, he was seeking.
What was the challenge?
Prior to the credit crunch of 2008, it was common for lenders to offer 90% or in some cases a 95% mortgage on a new build flat. However, after the crash of 2008 many lenders found that new build properties had been over-priced. With borrowers under financial pressure and defaulting on their mortgages, properties were repossessed without the lenders necessarily recouping their original lending. As a result, lenders are now much more cautious when lending at a high loan to value ratio for new build flats as they regard them as riskier. A ratio of 80%-85% is more the norm with a ceiling on lending on average of around £500,000.
How we provided the solution
As most banks will not lend at a 90% loan to value on a new build flat, Nick Plappert, Executive Director of Rose Capital, used his experience and knowledge of the market to obtain the agreement of a lender who was willing to offer this level of borrowing.
Rose Capital Partners is one of a select number of brokers who are part of a panel of lenders. This means Rose Capital has access to certain panel-exclusive lending products.
In our client’s case via the panel, Nick was able to secure the 90% borrowing needed, through a lender who listed specific property developers on whose new build properties it would lend up to 90%. Nick was aware that our client’s developer was on that list and after submitting the client’s application, the lender agreed to the clients’ high value £720,000 mortgage.
Nick prepared all the relevant client documents and evidence required by the lender in good time and moved quickly to secure the mortgage offer at a competitive interest rate so the client could pay his reservation fee and secure his first new home. The client was delighted.
What was the rate?
The 1.91% rate was fixed for 2 years, with a £999 arrangement fee.