Concluding missives before mortgage approval

Hauzen

My solicitor appears to be pretty close to concluding the missives on my current Scottish house purchase, and the vendor's agents are pushing to get things sorted out as soon as possible. My one concern in the current climate is that my mortgage application may be rejected and if the missives have been concluded then I'd be liable for £££££££££££££££££ in compensation to the vendor if I can't complete. My Agreement in Principle came back with an A-pass which apparently meant I'd get a fast-track full application and there shouldn't be any problems with it, but of course I can't be 100% sure and that is my main worry at the moment.

Is it worth trying to delay the missives as long as possible through any and all means until I can get confirmation of the mortgage, or is it a 'gamble' I'm just going to have to take? Any advice appreciated

Yorkie1

I know that Scotland has a very different system from E+W, but here I wouldn't want to be financially committed to a huge outlay (whether the full purchase price or a lesser amount but still lots of compensation) until I knew I could do so.

Can your solicitor delay things, and if you've managed to get a timescale for resolving your mortgage offer then that would help. Of course the vendors want things sorted out sooner rather than later, but at what risk?

googler

Yes, get your solicitor to stall as much as they can for you (without overdoing it, such that the other party withdraws, of course).

You have been keeping your sol informed of the progress of your application, haven't you....?

Hauzen

Yeah, the solicitor knows the status of my application at the moment (last spoke on Friday) and I'll be updating him again on Monday morning after I get in touch with my mortgage broker for another status update. The application went into the lender 11 days ago so there's still a bit of time yet until they could make their decision.

I know the vendor's agents are playing hardball at the moment with deadlines on their letters, but that seems to be pretty standard. I'm assuming that even if the other party withdraws, and then funding comes through not long after, we could go back to them with the offer and funding in place to then conclude the sale?

googler

..as long as they haven't found another buyer by that time, and as long as they don't take the hump at you getting this far without full mortgage approval in place......

GDB2222

Surely, your solicitor shouldn't conclude the contract without your having a firm mortgage offer. Just to be on the safe side, write to him and instruct him not to do so.

Hauzen

Yeah, my solicitor did mention he would look at ways to "buy time" until the offer came through, so I'll discuss that further with him on Monday.

googler wrote: »

..as long as they haven't found another buyer by that time, and as long as they don't take the hump at you getting this far without full mortgage approval in place......

I'm surprised things have progressed so quickly, to be honest. All the advice I'd been given regarging purchasing a house in Scotland was to have an Agreement in Principle lined up before making an offer, which I did, and then as soon as the offer was accepted the full mortgage application would go in. Our offer was verbally accepted on a Friday through my solicitor, the written offer was submitted on the Monday and then the mortgage broker put in the full application on the Tuesday. As far as I was told/aware, no full application could have been made without a specific property to base it on, and as the missives seem to have been relatively straightforward up until now then there hasn't really been much of a delay.

I'm sure I'm worrying over nothing but it's a nervous time all the same.

joolley

Whatever you do, don't complete missives. Buy as muh time as you possibly can. It could become very expensive for you. That or organise a bridging loan. Solicitors don't do these anymore but they're available. If agreement in principle given, unlikely not to get mortgage. Bridging loan would then be for a matter of days only.

PS: I'm in Scotland too.

Hauzen

Thanks everyone for your advice so far.. it sounds like buying as much time is the best option, though of course without pushing the vendor too far that they withdraw. Hopefully the mortgage offer will come through ASAP!

GDB2222

Hauzen wrote: »

Thanks everyone for your advice so far.. it sounds like buying as much time is the best option, though of course without pushing the vendor too far that they withdraw. Hopefully the mortgage offer will come through ASAP!

Hopefully it will. If it doesn't, though, what is plan B? So, your vendors put the house back on the market - so what? Unless somebody comes along with a better offer you'll still be the front runner.

tberry6686

In Scotland the rules are totally different. If you have made an offer and it has been accepted then you are legally bound to complete unless you have any form of get out clause in the offereg, subject to survey. If you don't have such a clause then fail to complete then you would be liable for the sellers costs and (if they later sell at a lower value) any reduction in the sale value of the property.

However you cannot get gazzumped in Scotland and the seller can't increase the price at the last minute either.