Offer accepted on house but got to wait 18 weeks

englandcrew

Hi,

As title suggests we have had our offer accepted to buy a house. The person we are buying from is buying another house and that person is buying a new build. The person buying the new build has been told by the builders that the house wontbe ready to move into for 18 weeks.

Our estate agent is asking for an AIP letter in the next few days.

My questions are - If we approach a company and it says the rate is fixed until 31/08/2012, does that mean we will lose several months on this deal as we will obviously not be getting the full five years from the time we move in?

When should I actually apply for the mortgage due to the time frame, my main concern is a company changes their rates and we could get a better deal

Will getting an AIP for the estate agent leave a mark on my credit history?

Wh05apk

An AIP will leave a foot print, but provided you do not get another dozen done this week, it will not cause a problem.

I would apply asap, in case there are any problems, lenders are slow at the moment, and if they start coming back and asking or statements/p60's etc it may take you time to collect them.

Once you have a offer you can then relax, just check that the lender you are considering issue's the offer with a long enough completion date to last till the expected date and a few extra weeks just in case of further delays.

The product you apply for now, will be the product offered, normally fixed rates wil have set end dates, so yes, potentially you will lose a few months.

As you are involved in a chain, with the potential for collapse, I would certainly not be looking at paying any fees up front (valuation excepted) in case the chain breaks, and you do not go ahead.

WestonDave

Worth looking at First Direct's offerings, if only because they used to (you'd need to check its still policy) allow up to 6 months to actually complete and then you'd still get the full X years. However that may not alone be a reason to take a mortgage with them (although their customer service is excellent) if their products aren't suited to your needs.

maninthestreet

31/08/2012 is only 8 WEEKS away!

harvey115

I am buying a New Build as well and it is usually like this as you know.

I think what you should do is that keep a 90 days window for your mortgage offer. Banks have different validity period of their offer but I think 90 days is kind of standard and some may provide bigger expiry date of the mortgage offer. Once you reach the expiry date you may not be able to extend the validity date (depending on the lender).

I would suggest you get in touch with a broker. Get an AIP, as this is just an indication from the lender how much they may be willing to lend you. Once you are close to 90 or 100 days of the completion apply with a full application. This will ensure that you do not have to ask for an extension if the offer expires before the completion.

You can also do this directly with the lenders, going direct also has its disadvantages.

Best of luck

englandcrew

Thanks for the swift replies.

I did approach a broker but the best rate he could find was 4.89%.

I was looking at going with Norwich and Peterborough as on comparison tables it says you are tied in for 60months and not a particular date plus the rate is 4.54% fixed for 5 years with LTV of 85%.

My main concern is a company in say two months time offering a better mortgage rate which will be significantly less than the one I apply for, but I guess that is just tough luck and may happen

harvey115

The good thing here to note is this:

You apply for a mortgage through a full application to your chosen lender N&P. You receive an offer letter and the lender is ready for you to complete the deal and chose them for your mortgage.

What I understand is that the lender you selected is happy to lend but you are not tied yet because you have only got an offer confirmation.

So in case you find something better then your current deal and you think you can get it. You can go for that deal instead as long as you have not completed.

One other downside is that you lose any money spent on the deal i.e. valuation, upfront fees if any etc.

kingstreet

Despite the length of time until completion, the builder will want its buyer to exchange contracts within a month, which means you'll also be expected to exchange at the same time.

You'll need a mortgage offer as quickly as you would if you were purchasing a newbuild.

harvey115

I believe the OP is not buying a new build but the onward chain is (the seller is).

If the seller is also asking for an exchange with a few months later completion for their 'not new build' house. I am not sure whether this would look any attractive to anyone.

kingstreet

Just imagine a chain where everyone doesn't exchange at the same time! :eek:

englandcrew

The house I'm buying is not a new build, the seller I am buying off is not buying a new build but the person my seller is buying off is buying a new build. what does that change?

Thanks