Signing mortgage offer before survey is completed

icklefifi

Hi everyone.

I am a first time buyer and so would welcome some advice please

I have had an offer accepted on property and received a mortgage offer on 4th December which is valid until 3rd Jan.
The bank who offered mortgage are also arranging my survey - through a surveyors who work with them.

The surveyors called on 8th Dec to ask for payment which I gave them straight away on the phone. Then I didn't hear anything for a week and half so I chased the surveyors. Person in the call centre looked up my case and said survey hadn't been arranged but they weren't sure why. Then about an hour later, estate rang to say it is has been arranged for 2nd Jan.

But my mortgage offer is only valid until 3rd Jan, so I rang bank to see if I could extend it. Person on the phone said no it can't be extended, and suggested I sign mortgage before the survey was completed. Because offer could be adjusted after if valuation was different.

I said I don't want to do this - surely this is common sense or has anyone else agreed to a mortgage before the survey??

Bank also said if I didn't sign this agreement they would just send me a new one after 3rd Jan but I am not convinced whether that's true.

Not sure what to do, do you think I should try to call bank again and get a different member of staff?
The reason for the delay in survey is their fault, not mine.

m0bov

Is this a valuation or a homebuyer survey? If its a valuation then you won't actually see the report as its for the lender. So you should be ok to sign it. You are having your own Homebuyer survey ar'nt you???

m0bov

Did you go via a broker? If so get their advice.

icklefifi

Thanks

Yes it a home buyer survey, but I am bit worried about signing the mortgage in case there are any problems or work that needs doing which I don't know about before I sign then I wouldn't be able to change my mind.

No I didn't use a broker.

m0bov

If its a home buyer that you have commisioned then I would wait, you'd be mad to commit beforehand. Insist on the surveyor picking up the cost of another offer. Although I'm not sure why you got an offer before the survey, did you not mean a AIP rather than an offer? You still might decide not to purchase the property.

julieb1987

Sounds like an AIP. We had 6 weeks after we applied to instruct the bank to arrange the valuation survey. After that, the formal mortgage offer came through and doesn't expire until April. If you don't sign it then you may have to apply again and the rates may have changed, and you may have to pay an application fee again (if there is one). Even if you sign it you don't have to take it. You can pull out at any time. Interest isn't payable until funds are transferred to your solicitor just before completion.

Just sign it and send it back ASAP to guarantee arrival before it expires.

icklefifi

Thanks for the advice.

I assume AIP is agreement in Principal, but I have already agreed that. This is the actual mortgage offer document (I already have sort code and account number linked to it which I had to give on the phone).

It is a fee free mortgage, the only thing I have to pay upfront is for the Home Buyer survey. So don't think I would lose any money if I don't sign, but not sure whether they will make me new offer with the same rates.

JPB123

I would check it again. A Decision in Principle may be valid for 30 days (Skipton for instance), although usually 60-90 days.

If no valuation has been done, a mortgage offer wouldn't have been issued. Which lender is it?

I am an Independent Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

pinkcheshirecat

Was it HSBC by any chance? This happened to us. The way my solicitor explained it to me was, they offer you the mortgage subject to survey. Our mortgage was underwritten first, so they were happy to lend to us, they just needed a suitable property for security. They then issued a mortgage offer valid for 6 months on that property. When we needed to revise the offer the mortgage had to go back to the underwriter, it was much quicker 2nd underwriting though.

icklefifi

Yes it is with HSBC (wasn't sure if I could write that on here).

Pinkcheshire cat - Thanks for your advice but I am still a bit confused. Did you sign your offer before you had the survey? and then get issued a revised offer after the survey?

hazyjo

Seeing as the average house purchase/sale takes around 3 months, why on earth are mortgage providers offering a mortgage offer for a month? I am confused. Never heard of that. Usually 3 or 6 months. Are you sure it's not the AIP that's valid for a month, and you're paying for a separate mortgage offer? If it was the formal mortgage offer, they'd need to value it first (ie send a valuer round)...

Maybe it's just early and my brain's still frazzled from Christmas...!

Jx