Likelihood of mortgage lender pulling out after exchange

Alligator1

Hi, I'm planning to buy a new build house from a developer having negotiated a substantial drop in the price.

I've got a mortgage approved in principle and I'm hoping to get the survey done next week.

I know at this point they will send out a formal offer and I can arrange to exchange contracts and I will pay my deposit.

I'm worried about if there is any potential for the mortgage lender (Northern Rock) to withdraw the mortgage offer after I've paid the deposit which could lead to the sale collapsing and me losing my deposit?

I've been completely honest on the application etc and had no other applications for credit done since the mortgage app - I'm just worried about anything which could mess the process up. Don't think I'll sleep until I've got the keys!!

Any thoughts from anyone? Particularly mortgage brokers, thanks

VIGILANT22

I'm confused..why are you not asking your own mortgage broker?

Alligator1

He's away all week on holiday and it's just something Im worried about.

VIGILANT22

Alligator1 wrote: »

He's away all week on holiday and it's just something Im worried about.

Contrary to what people may post NR is a good lender...if you've met the criteria and disclosed everything, you will have no need to worry..they have excellent service levels so they wont keep you waiting too long for it going to offer...now off you go and enjoy yr weekend..:)

BOGOF_Queen

Check with your solicitor on Tuesday - I am sure that she/he will not exchange until there is a definite mortgage offer in place to allow completion - mortgage funds will have to be in the solicitors client account on completion day.

Alligator1

Thanks guys. Yes met criteria and disclosed everything. Just worrying after the horror stories you hear about deals collapsing when lender pulls out.

So will all the checks etc have been done by time formal offer comes out? Would they only pull out if they had adverse info etc? Not that there is any, I just assume there must be a good reason for a lender to pull out once approved though other people have said otherwise!

Comyface

The problem that some people have had with newbuilds in recent times is that the mortgage offer expires before the property is completed and then the lender won't issue a new offer because the property value has dropped. Is your house completed?

Alligator1

Nearly done. Completed by end April. Does it have to be totally completed with kitchen etc in before survey or just safe for surveyor to go in? We are putting in 30% deposit so hope house price situation can survive that!

Ditch_Crawler

Alligator1 wrote: »

Thanks guys. Yes met criteria and disclosed everything. Just worrying after the horror stories you hear about deals collapsing when lender pulls out.

So will all the checks etc have been done by time formal offer comes out? Would they only pull out if they had adverse info etc? Not that there is any, I just assume there must be a good reason for a lender to pull out once approved though other people have said otherwise!

Maybe I am being naive, but it seems to me that a lender will only make an offer when all of its checks have been completed. If the offer is subject to any conditions, then obviously you will have to comply, but I would be surprised if they could get away with simply changing their minds.

Ditch

Alligator1

Hope so, developers want to exchange within 28 days! Eek! Not going to sleep much between now and then. How long is it usually between exchange and completion? Can you request it to be quick?

Comyface

Alligator1 wrote: »

Nearly done. Completed by end April. Does it have to be totally completed with kitchen etc in before survey or just safe for surveyor to go in? We are putting in 30% deposit so hope house price situation can survive that!

The house doesn't have to be completed before you instruct the surveyor. It doesn't even have to be started! The surveyor can look at plans if necessary and then the mortgage offer will include a condition that it's completed before completion IYSWIM.

I'd double check with N.Rock how long the mortgage offer is valid for, should be about six months (if not more), then you can relax (ish).