Please can somebody clear this up for me...

Dazsharps

I am trying to buy a new build off plan ( I know the risks but im willing to take the chance)

The houses are only due to be complete november / december.

I am confused as to when i would need the deposit for the home and how this would work.

If you buy a second hand home your deposit is paid via your solicitor just before completion and then your mortgage payments start.

What i need clearing up is if you exchange contracts on a new build today that isn't going to be ready until dec When would you need to pay the deposit?

I have read that the builder will request 10% of the price before building is started.... surely this isn't the case as you need to give the deposit to the mortgage company in order for them to give you the mortgage right??

Im confused, if anybody has experience with this, in particular persimmon homes then please can you let me have your wisdom

Many thanks

lincroft1710

Deposits are paid on exchange of contracts. Best advice is to see a solicitor, you will need one. Actually that's not the best advice, best advice is not to buy off plan but if you insist on doing so, check out any posts re Persimmon Homes on this and other websites.

Nenen

Just in case you don't know - our solicitor advised us (and lots of posts on here back this up) that it is rare for new builds to be completed on time.... apart from anything else, the British weather is so unpredictable. If they say Nov/Dec I certainly wouldn't expect to be in until 2010! By the time they are completed' if prices have dropped you might not get a mortgage for what you have agreed to pay at today's prices.

PasturesNew

Mortgage offers have a limited life ... if it runs out and the place isn't built, then you might find (like 000s of other people) that in trying to get a new mortgage offer the lenders laugh in your face and you need to find another £40-50k of your own money.

dodgy

FWIW our persimmon house which we bought off plan (well, the foundations were down when we exchanged) was completed a month early. I did a LOT of investigation to make sure that they were working on site and looked to be completing the builds.

We move in next Friday :-)

F_T_Buyer

So how is the house dodgy?

dodgy

Really pleased. Few snags, as you'd expect, but the benefit of the builders still being on site means they can easily nip over to sort things out.

AMILLIONDOLLARS

You need to pay the deposit on exchange of contracts. Before doing this your solicitors will check that you have the funds/mortgage in place before exchange. Now the important thing to bear in mind is, when does your mortgage offer expire. If it expires before the flat it built or before completion, then you would have to try to apply for an extention on the offer, or apply for a completely new mortgage. The risk being is that whoever values the property a second time around, may not value it at the price you have agreed to pay, and if you cannot make up the shortfall and can't complete then you lose your deposit and could be sued by the builders for the money owed on the flat.

If they haven't started building yet, I would not want to risk my deposit in such a way. At the moment a lot of people who have bought off-plan during the boom, are now in the position I have described above. If the developers are not getting their money in from these buyers they cannot starting building elsewhere. Go back when the foundations are laid, it will give you an indication of whether the developers are in trouble or not.

AMD