Developer changed completion date

dannyblay

Hi
I reserved a property from keepmoat in feb 2012 and applied for a mortgage with halifax and an offer was given in feb which is valid till the end of this month (August). This morning i had a phone call from the developers saying the completion of the property has delayed and they think it will be completed by the end of september.
What do you think is going to happen to my mortgage offer will the lender be prepared to extend the offer.

Yorkie1

You will need to ask your lender - we cannot answer that question on the information you've provided.

If the lender will not extend the offer, come back for further opinions.

dannyblay

Thanks Yorkie 1 I will do that.

harvey115

Can you give a bit more details on the reservation please?

- How much did you pay to reserve the property?
- Have you exchanged?

Thanks

dannyblay

I reserved the property with a £250 reservation fee and I think four weeks later when my mortgage offer letter has come through I paid my 5% deposit which was about £8000. We have also exchanged contracts buy funny enough it has no completion date on it.It is just a letter that myself and the vendors solicitor signed telling me what my rights are as a buyer and the rights of the vendor plus an architectural design of the house and the plots showing me which area of the land is mine and which one i am sharing with neighbour.
I had a call from my mortgage advisor over the weekend saying the bank might decide to change the product they have given me,which I think might be more money to pay or less.
I will appreciate if someone has gone through this process before to help or anybody at all out there who can advise me on what to do. Also if I can claim a compensation from the developers. Thanks

Dave_Ham

Hi there,

Compo is likely to be out the window, have you got your own solicitors dealing with this matter and what have they had to say..

It looks like you have exhanged with no date, which is not necessarily the best advice...!

What product with Halifax did you have, at what purchase price and mortgage value. Will be able to tell you what their current product range is?

Just to highlight the danger of your position, say you cannot get a mortgage offer now from the Halifax or anyone else?

dannyblay

I am on a 2 years fixed rate on 4.99%. The purchase price is 164,995 and I am borrowing 132,994 including the product fee. I am putting in 5% and the developer is putting 20% which i am going to pay back in 10 years time.
When you said to highlight my danger will I need to go through an application process again?

littlesparkles

I'm buying a new build. I haven't exchanged contracts yet but I do have the contract already. The lawyers letter with it advises me to sign the contract subject to acceptable mortgage offer and searches. This means I can pull out of the contract without penalty if I cannot find a mortgage due to the builder not completing on time. Have you asked your lawyer if there is something like this in your contract?

littlesparkles

I would get the reservation fee and deposit back if this was the case.

liubeliu

You would have Exchanged but with Completion on notice which is common when exchange happens so early during the build phase. Did your conveyancer not insist on a long stop date for completion i.e. by the expiry date of mortgage offer. Did you use the builders recommended conveyancer?

Dave_Ham

Sorry, missed the question earlier.

Not sure on the Newbuy (assuming it is) products and cannot check at present - will try later.

Your danger is the legal side, that you have exchanged I think and have absolutely no certainty about having a mortgage offer in place that is valid.

This is commonplace amongst new builds where their solicitors have been used, as clearly you are not sure what you have already signed up for..

Halifax are reasonable lenders, although I fear you are going to have to re-apply. You may get an extension in weeks, but unlikely any longer...

Good luck