Mortgage pulled?

cankle

I got a mortgage offer from Abbey which is great!! Ive also received a letter from my solicitor and its a bit erm well scare mongering!! She basically said she felt it prudent to advise me of the risks of my mortgage and in view of the current uncertain financial climate maybe exchanging and completing on the same day would maybe reduce the risk of my mortgage offer being changed between exchange and completion. She has given me a form to send back to her with two tick boxes either my preference for exchanging and completing on the same day or exchange and then agree a completion date (I have chose this option!) Is this normal for solicitors to ask this or even propose a same day exchange/completion? What would cause a mortgage lender to change or even cancel a mortgage offer??? Im a bit worried now, thought once I got the offer the only thing that could go wrong would be something on the sellers side!!!

ALIBOBSY

It used to be standard practice to exchange one week then complete later (the following week on our current house).
BUT there has been a few threads where people have exchanged and then the bank pulled out before completion, they are getting very funny and twitchy about mortgages now and will recheck all your credit files etc on the day of completion and can and sometimes do either amend the mortgage offer or even withdraw it.

Your solicitor is obviously aware this has become more of a possibility in the current climate and so is giving you fair warning, if there is a problem after exchange you lose your deposit and can be open to further costs.

Personnally I think we would opt for both on one day or at a max of one day apart, but its your choice. Have a word with your solicitor to see wha she advises as best option.

Ali x

Wh05apk

Very unusual for the offer to be withdrawn, usually because they find something on you, ie undisclosed commitments/credit issues etc.

Thrugelmir

In a property chain exchanging and completing on the same day can cause problems. The week between exchange and completion allows all parties in the chain time to arrange removals etc.

cankle

There are only two of us in our chain me (a FTB) and the seller (no onward chain) so Im hoping it will all be relatively smooth from now on, just that letter really spooked me!! There isnt any financial skeletons in my closet (well none that are hidden anyway!) so think it will be ok, but I guess the only point that I can breathe easy is when I get the keys in my hand then! God and I thought once it got to exchange it was a done deal!!!! this is seriously stressing me out!!

Senior_Paper_Monitor

The same day exchange/completion became common practice in the period of no deposit, 100% + plus, new build properties - for obvious reasons i.e no depsoit to 'secure' the exchange and the buyer obviously had no funds to pay a non compleytion penalty subsequently.

Often very difficult to achieve in a chain purchase - first time I've heard a solicitor encouraging it in that way.

SouthCoast

There isnt any financial skeletons in my closet

Has the vendor got financial skeletons and could be made bankrupt between exchange and completion?

cankle

Not that Im aware of!! they are an elderly couple that are moving to a council bungalow, the lady has problems with her hip so need a bungalow. They have lived in the house for 35 years so Im assuming they have long since paid it off

ajsdoc

You need time to plan between exchange and completion, particularly in a chain.

The other side is if you exchange and complete on the same day parties can pull out leaving you high and dry in terms of time off work/removals/etc/etc.

Moving house requires planning a period between exchange and completion allows this.

donkey1969

Our solicitor advised exactly the same, she does to all her clients now where it is at all possible, as she had a case earlier this year where the mortgage was pulled between exchange and completion, we were able to do it as we were in rented and the house we were buying was empty, I've heard that more and more sols are advising this if possible.

kingstreet

IMHO this is a very sensible suggestion and we're likely to see same day ex/comp become more and more widespread. The incidence of mortgage audits being done when the solicitor sends the report on title means the possibility of an offer being withdrawn gets greater all the time.

The solicitor could find himself in trouble if their practice didn't reflect what's happening in the market. By giving the client a choice, the solicitor is covering himself in the event of a client's offer being withdrawn.

I don't think exchange and completion is as difficult as it's described. As long as everyone in the chain knows that's what's planned, exchanging first thing in the morning and completing a little later is no worse than a gap of a day or two more. The report on title is probably faxed to the lender several days before and the money in place on the correct day.

Perhaps the best way to counteract the problem is for the solicitor to fax the report on title a few weeks early so any audit takes place well before exchange?