Mortgage issues - Buying a house

mac456

Hi all,

At the moment me and my gf are in the process of buying our 1st house (new build)

We are/were currently waiting to exchange contracts and pay our 10% deposit, and sit back and wait. We had our solicitor make some changes to contract which we were waiting to hear back from their legal team to confirm and exchange by the 15th of this month.

My gf went on holiday on the 15th and we explained this to our solicitor a few days before to which she recommended that we both signed the contracts before she went so that while she was away I could finish the deal (instruct her) and pay the deposits once the builders legal team confirmed the changes.

So, we still have heard anything yet, gf is back now so I assume they are still negotiating.

Now keep in mind we have had confirmation from our bank that our mortgage offer is 100% confirmed, letter through the post etc.........

Anyway today I get a call from the mortgage broker saying that the bank has now requested that a paper application is done! (they have already confirmed it though???)
And was advised by the broker not to exchange contracts until this is complete, which is fair enough but

My worry is though, that we signed the paper work at the solicitor. We haven't instructed her to go further though and no payment of deposit has been made. If that paper work was sent to the builder for some random reason with our signatures on it, would we be liable?

Thrugelmir

mac456 wrote: »

Anyway today I get a call from the mortgage broker saying that the bank has now requested that a paper application is done!

So you've never previously signed an application?

Southend1

Are you sure they don't just mean you need to go in to sign the mortgage deed?

harvey115

As long as you have not asked your solicitor to exchange you legally do not need to worry. Your solicitor would need a signed contract in place for the exchange to take place, so that is a standard practice.

You need to trust your solicitor because they are working for you and not for the developer. So keep them in loop on your application and ask them any questions on the legal side, they are legally obliged to give you details on the process as you are paying them.

So once your offer letter is received by your solicitor and the deposit money only than they should allow the exchange. It is up to you to say yes or no for the exchange to take place, if you are not happy simply tell your solicitor to not exchange and they would do as you say.

So here is what I suppose would happen:

- Mortgage offer documents received by you
- Mortgage offer documents received by your solicitor through the lender or their solicitors to confirm he offer
- You send the deposit money to your solicitor
- You instruct your solicitor to exchange on a given date (developer would have given you an exchange date, but this can be changed due to delays on any sides and you can ask for extensions directly from the developer)
- Your solicitor than exchanges the contracts on your approval and satisfactory approvals from the lender as well
- Once the house is complete, your lender and you transfer the remaining money for the purchase to the solicitors
- On the day of completion, all money is paid to the seller and you get the keys


Hope this helps.

Best of luck.

mac456

Thank you for the help Harvey, thats has definitly helped.

No we havn't asked the solicitor to go ahead with the exchange, only signed the applications due to the gf being away on the dates when she was away so I could instruct her if needed.

I would of asked my solicitor but she is away till next Tuesday.

Its a shame that the bank has put a spanner in the works! what would of happend if I had done the exchange and than the bank pulls out?

Thanks

Mac

harvey115

The solicitor would only exchange if the finances are secured i.e. you have a written mortgage offer. Otherwise they could ask you to sign a document that you understand the risk and happy to exchange anyways.

So, if the lender says no after exchange, you may apply to another lender but I hope it should not happen at all because the lender would also agree to exchange in reference to the mortgage offer and that they willing to tie in. However they are not legally obliged to complete and can pull out anytime they wish to (I hope it does not happen to anyone).