Help!!! Very frightened FTB!!

cosmic_spice

Hi - please help! I'm a FTB who cant eat or sleep at the moment!

I'm buying the flat I've been renting from the landlord in a private sale. Its my dream flat and I'm getting it under market value (which I've had verified) independently. I have an AIP in place and my offer has been accepted verbally.

BUT - my landlord wants to exchange now and complete in June to avoid redemption fees. This is frightening the life out of me. I wanted to exchange and compete immediately so that if my company went bust and I lose my job (there is a small risk of this - I would say 3% risk) I would have completed and not risked my deposit. I'm not worried about making repayments as I have savings I could live on whilst looking for work but I am literally beside myself worrying about losing my job before completion.

It is complicated by the fact that a large chunk of my deposit is coming from family - I don't mind risking my money but different with somebody elses!

So my questions are:

How can I mitigate this? Is there an argument for offering the landlord a 5% deposit on exchange not the 10% he has asked for? I could live with this risk because its my money not other peoples. Are there any other workarounds that anyone can see?

Do mortgage companies check your details again if there is a gap between exchange and completion ie how would they know if my company closed/I got made redundant?

I've heard horror stories of mortgage companies going back on decisions - is this only where people have lied? someone told me sometimes in this market it is for no apparent reason!??

Thankyou so much for reading - I cannot tell you how scared I am!!

Cosmic X

ILW

How much is the landlords redemption fee?
If its not much could be worth coming to an arrangement to move things on.

clutton_2

why would you want to take on a 25 year responsibility for a mortgage if you are about to be made redundant... it sounds as if you are thinking with your heart and not your head

i am not surprised you are scared... you will be even more scared if you buy then ARE made redundant.. how will you pay the mortgage then ?

on a more practical note... if you exchange now and dont completge till June your lender will probably want another Valuation Survey as they normallyh only last for 6 months and the survey may come back with a different figure...

it is possible to negotiate a 5% deposit but only if the vendor agrees...

and yes .. mortgage companies can check at any time on information you have supplied.....

cosmic_spice

Thanks - the redundancy risk is very slight hence I don't want to lose this opportunity for a slight risk. I would have enough money to pay the mortgage for 3-4 months in any case. The risk is to the mortgage in that scenario...

Fire_Fox

Tell the landlord you will exchange in May and complete in June, he isn't likely to sell to anyone else in that time frame as it would be hassle and anyway as tenant you can refuse all viewings ... I agree with Clutton if you think you might be made redundant you need to reconsider, you will need to make the mortgage payments and the government will not help until you need to have owned the place for quite a while before you claim - I have a feeling it is a year or two!

poppysarah

Why doesn't he want to wait until nearer completion to exchange? Looks like he wants to tie you down fast. Does he know something you don't?

Do not risk your familys money. Why haven't you got the whole deposit yourself?

How does rent vs mortgage compare?

You have considered LHA if you lose your job and it won't cover your mortgage.

cosmic_spice

Sorry poppy I don't understand your response?

What is LHA?

What do you mean re: rent v mortage? Do you mean in terms of actual payments?

As for why I don't have the whole deposit - I just dont!

clutton_2

LHA = local housing allowance - used to be called Housing Benefit - you need to find out how long you would have to wait before you qualify for it IF you are made redunant... a few years back it was 9 months... by that time (if you had no funds) you would have been re-possessed long ago.....

poppysarah

How much is rent now and how much will mortgage be?

You don't have 10% deposit. Do you have 5%?

LHA is what replaced housing benefit. You live on your own? So you would be entitled to a certain amount depending on where you live.
https://lha-direct.voa.gov.uk/Secure/LHARateSearch.aspx?SearchType=PostCode
This lets you know how much the govt would pay if you lost your job and you needing housing cost help. There is some mortgage help available from the govt but it's only helped a small number of people (One fund has helped 2 people. And probably cost enough to build 500 council houses already)

The bit about the landlord wanting to exchange quickly - why
Is it because there's a communal repair bill he knows is due? Because he expects the value to drop because they're building a motorway/nightclub/brothel next door?
Triple check the local news, the council's planning website, the local forums and everything just to make sure he's not tieing you into something that in a few months will seem very unattractive to you.

Is it your dream flat as a single person? If you met someone and wanted to have kids, would it still be? Is it big enough for a lodger if you needed help paying the mortgage and bills?

Fear is a healthy emotion if you use it right.

cosmic_spice

Ah Ok - thanks!

That genuinely isn't a concern for me. I could get a job on half my current salary and still manage. The only risk is in the window between the Exchange and Completion...

So what I'm hearing is suggest to the vendor that we exchange and complete closer together.

If he wont do that I can try for a 5% deposit (that is my money which I would be risking).

If he wont do that try to come to an arrangement whereby I perhaps pay some of his redemption fees for a quick completion?

Failing all that dont buy?

Poppy - my rent is £1000 and my mortgage would be £1050.

Thanks

Cosmo X

Fire_Fox

If you exchange contracts but fail to complete you are NOT ONLY risking your deposit. The vendor can take you to court to force you to complete or for damages, and any legal costs will be chargeable to you if you lose. According to WelshWoofs thread on this, it's common for the court case to drag on for a couple of years, imagine the legal fees ....