Sale of our dream home about to fall through - help!

[thiccapricot]

I guess I'm clutching at straws really.

We are first time buyers. Had an AIP approved with Nationwide Helping Hand mortgage, where they offer you 5.5% your salary with a 10% deposit.

We found the perfect flat and made an offer which was accepted. Instructed a solicitor and sent everything over to the mortgage advisor for the mortgage application today.

The mortgage advisor just called to say that the Helping Hand mortgage will only loan 5.5x salary on a house, not a flat. Nationwide specify a 15% deposit on a flat. We have no way of making up the extra 5%.

We are absolutely devastated and do not want to pull out. I'm wondering if anyone here has had a 5.5x mortgage approved with a 10% deposit?

So as not to dripfeed, i earn £37,100 and my partner earns £35,00 working in tech and finance.

Any advice welcome harsh or otherwise!

Forgot to mention we are in England.

Is that 5.5 x your joint salary? That is a huge amount

Are the repayments really manageable, along with all the service charges, ground rent, etc?

@BritInUS1 thanks for your response - after service charge, ground rent, council tax, gas and electric we'd still have circa £2,000 per month

5.5 is the norm really for buyers in the South East these dats especially if first time buyer.

Assuming you are both in the type of jobs where your salaries rise I'd go to a broker - they should be able to help you find this sort of career mortgage. Good luck

Try a broker? London & County (now L&C?) Looks like you are both in stable employment sectors with career progression which could count in you favour for affordability - as long as the figures work and you are youngish with no dependents.

The reason they require a larger deposit is they expect the flat to lose value in the mid term. Most banks have upped the deposit requirement for flats since mid-2021 I believe

Is that 5.5 x your joint salary? That is a huge amount

It's pretty normal. I know people who have borrowed 6 or 7 x.

tbh OP maybe you've dodged a bullet. Clearly they believe there is more risk in the flat market which I agree with. The market is very heated at the moment.

Agree with last comment. If bank doesn’t believe there is value in the flat, more likely than not, they are right.

Try negotiating price with the seller ;) I am sure they’ll have same issue with the next set of buyers anyway.

I presume you had a healthy budget, could you perhaps look at a house further out. Honestly I think the best thing to do in this market/economy is to future proof as much as possible.

Thanks everybody. There is some really good advice here - I was really stumped as to why a house would need a lower deposit than a flat but it makes sense.

We will have to have a (short!!) hard think about this and make a decision tomorrow. I don't want to make a bad financial decision based upon our love for this place.

It was our broker who 'broke' the news to us (sorry couldn't resist). @SmithfamilyRobinson thanks - perhaps we will call L&C tomorrow and try with them, but listing the concerns raised here but see what they say.

Thanks again all!

@hypaingea

Is that 5.5 x your joint salary? That is a huge amount

It's pretty normal. I know people who have borrowed 6 or 7 x.

Wow ok I am way behind on these things

OP please ignore my comment

I mean I'm not saying it's a good thing but otherwise no one could buy as prices are so out of whack vs salaries. Obviously low interest rates has allowed this.

off topic ish but it's not good economic policy to have so much income servicing housing.

Have you tried asking your families if they could give you a loan for the additional deposit required? To be repaid when you sell the flat maybe?