Retainer on mortgage - how does that work?

kneame

Excuse my probably very basic question (FTB) but we've just had our mortgage offer through (yay!) but the lenders have put a retainer of £5000 on the offer. Does anyone know how this works? We're going to get our own survey done to check exactly what needs doing but say there is £5000 worth of work to do, do we get a cheque back from the mortgage company when we've done the work?

Also, does anyone have any advice on going back to the vendors to renegotiate a price? What's acceptable?

Thanks!

brannyrhino_2

Yes the £5000 is held back from the mortgage to force you to do the work. The problem for you is you will have to make up this shortfall in the short term so the mortgage can complete.

The lender HAS to tell you exactly what the retention has been made for so you are clear where you stand.

You can go back to the vendor and ask them to knock £5000 off the price but they will more than likely say no but you should negotiate something off the price or sk them to make good the work.

The vendor is going to hit this problem with whoever they sell too so should show some flexibility.

Good luck