Mortgage for new build - urgent advise needed please

tracey2009

Hi, I'm back! Thank you so much to everyone who gave me advise last time (especially Mrs Bumble) - now we are faced with yet another problem! Well it might not be a problem......

Basically, Clydesdale Bank have agreed us a mortgage in principle as long as we can put down a 25% deposit (we will struggle but can do it). However, the house we want is a new-build and will not be ready until May/June 2010. It is a development by Persimmon Homes and the estate is complete all but this 1 house and 3 other houses. As we do not actually need the mortgage til next May/June (but we have to get it agreed in the next month so we can instruct the solicitor etc - Persimmon Homes insist on this) Clydesdale are saying we have to re-apply for the mortgage every 3 months until next May/June. Is this just because things change so much or could it be that we get to next May/June and they will decline it?? I am so confused! By then we will have paid Persimmons a 5% deposit, we will have paid solicitors fees etc.....

Please can someone assure me that this is mereley a procedure or should we be worried.....?

Thank you so much in advance x

Kyrae

We're in a similar situation, though our mortgage offer is valid for 6 months rather than 3, but will still most likely expire before our new build is complete.

On the advice of board members, we're currently in discussion with our solicitor to get a clause put into the contract to say that should our mortgage offer expire before completion and the mortgage company will not extend their offer, then we may cancel our contract and the deposit will be returned to us. Solicitor says it shouldn't be a problem to get this written into the contract and says they're asked for this quite often, so might be worth trying this. Or get a clause written in to say that if the new build isn't completed by a certain date, then you can cancel the contract. I'm no expert on this though, sure some other board members are more familiar with this situation

hostman

Mortgage offers always expire after a number of months. Typically 3-6 months, but it will vary between lenders. Your application fee is then refunded if you do not take up the offer within that time frame.

Do not sign a standard contract with Persimmon if there is any doubt the mortgage would be declined when you apply next time round. Insist on a conditional contract, whereby if your mortgage funding falls through you are not tied to the contract and will receive your deposit back. We're buying a new build with Persimmon and exchanged yesterday. In our case the house is built and ready to move into upon completion next month. When we came to sign the sale agreement I saw some wording along the lines of "If you need a contract conditional to a mortgage office, we may be able to modify the contract".

Also, are they asking you to exchange now, this early in?

tracey2009

Ah right, thank you so much for sharing your experience. I will get on to the Solicitor at lunch time. That will be great if he can do that. Thanks again x

tracey2009

Thanks Hostman - we reserved the house last Thursday and put a non-refundable £500 down.
We now have 1 month to exchange contracts. Before we can instruct the solicitor tho we have to have the mortgage sorted. That is why we are nervous that the mortgage company are insisting that we have to re-apply every 3 months(!) - but from what you say most mortgage companies will insist on this.
Would you advise that we spoke to Persimmon and the solicitor to see what they can come up with?

Good luck with your move.

hostman

tracey2009 wrote: »

Thanks Hostman - we reserved the house last Thursday and put a non-refundable £500 down.
We now have 1 month to exchange contracts. Before we can instruct the solicitor tho we have to have the mortgage sorted. That is why we are nervous that the mortgage company are insisting that we have to re-apply every 3 months(!) - but from what you say most mortgage companies will insist on this.
Would you advise that we spoke to Persimmon and the solicitor to see what they can come up with?

Good luck with your move.

Yes, we did the same Re: reservation. In our case the exchange deadline was extended to almost two months, as we were waiting to sell our house (which happened very very quickly, we got lucky) and then it was extended again because our lender wanted further local searches completed (mining search specifically) and these can take a few weeks.

The £500 reservation fee comes off the amount you'll need to pay them upon completion also.

A good conveyancer won't charge you anything if the house purchase falls through at the early stages. You'll need to instruct one now in order for the process to start, time is on your side in terms of local searches though.

Its highly unlikely this is the same development as ours, but which town is it in? On our development most were built in 2007/2008, with ours and a few others being the last to go up.

tracey2009

It's in a small village in West Cumbria. I notice your's is in Luton is it?

So, is all of this normal then in terms of the mortgage offer expiring etc. We are a bit scared to take this any further at the moment. I will probably try and speak to the solicitor and Persimmon. Although, I don't think Persimmon will be very helpful as they failed to warn us about any of the above!

hostman

tracey2009 wrote: »

It's in a small village in West Cumbria. I notice your's is in Luton is it?

So, is all of this normal then in terms of the mortgage offer expiring etc. We are a bit scared to take this any further at the moment. I will probably try and speak to the solicitor and Persimmon. Although, I don't think Persimmon will be very helpful as they failed to warn us about any of the above!

Ours is in Manchester, we're moving lock stock and barrel from Luton.

Mortgage offers expiring is very normal.

tracey2009

I absolutely love Manchester. I lived there for 3 years and only just returned home to West Cumbria (my roots) 3 months ago! I spend every other weekend in Manchester tho, lol!

Thanks for the advice it's greatly appreciated and I hope your move goes well :j

billycoco

Hi Tracy

Congratulations on obtaining your mortgage offer looks like you had a bit of a nightmare.

If you dont mind, please could you tell me if the Mortgage you got with Beacon is in joints names, or did your boyfriend have to go it alone. I only ask as similarly to you, I have had credit problems in the past, a default for £629 in 2005 and am now terrified we wont be able to get a mortgage because of it.

Thank you so much.

tracey2009

Hi, no we had to do it in my boyfriends name only as I could not get on. However, your rating doesn't sound as bad as mine so if you go to a broker and explain your situation to them they could see what is available for you.
Reading the other posts on here it looks as tho RBS only check back 3 years so you should be ok with them?
GOOD LUCK x