Gap between completion and exchange

iloveturnip

I would be really greatful if someone could answer me a quick question again
We are in the process of buying a house and wanted to know how long you can delay completion from exchange of contracts. Basically we want to exchange contracts asap to secure the house as from what we understand this is effectively the point of no return. But we want completion roughly a month after contract exchange, is this feasible ? am i right in thinking completion is the day that the mortgage effectively starts i.e. the first mortgage payment would be 1 month from the completion date?

Any help would be greatly appreciated :A x

nikki1520

You can have as long as you like between exchange and completion, so long as your seller agrees - if he's in a chain, it may be a condition of the exchange that you complete in a certain amount of time. This can be anywhere from 7-28 days and all depends on when the whole chain is set to move.

You can of course ask for a long completion - prob best to discuss with your solicitor.

The mortgage cannot bedgin until the property is yours legally. So in effect, you are right - depends on your terms and conditions so check carefully

iloveturnip

I'm chain free, first time buyer on a new build. I haven't asked the developer yet.....Am i right about exchange of contracts being the point of no return?

nikki1520

Not exactly. The point of exchange means you are agreeing to complete the contract. Your deposit (10%) is lodged with your solicitor. If you do not complete, then the vendor gets your deposit to cover his time, expenses and inconvenience. Best case, if you pull out after exchange, you lose your deposit - worst case, the vendor sues you as well for non completion.

It is possible to pull out after exchange, but not advisable for the reasons above.Better to make sure all the ducks are in a row prior to exchange.

Of course, if the vendor fails to complete then the boot is on ther other foot, so to speak

nikki1520

Oh, just noticed you're buying a new build.

Things to be aware of:

Will the house be complete when you want it to be?
What happens if the relative value of the property falls between exchange and completion, and then your lender will not advance the full mortgage - esp important with a long gap in between? Some buy to let investors were stung with this - they bought off plan, market dropped, mortgage company failed to pony up the cash so they couldn't complete, then they got sued by the developers
Are you getting value for money? You'll probably pay a fair whack more for a new build than for exactly the same spec but that has been lived in