Mortgage Offers on a new build property

spags1909

Hello All, I was hoping that one of you may be able to help me.

I have recently reserved a plot on a new build development which isn't due to be completed until April/May 2014!

As I have reserved the plot the builders require me to exchange contracts within the next 28 days.

The problem I have is that there is no mortgage company that will give me a mortgage offer that far in advance. I did speak to a broker who said that there was one company that would give a mortgage offer for 10 months but they wouldn't give me the name but did say that they were a fairly major lender. Does anyone know who this is?

I've also heard about mortgage companies "extending" the mortgage offer if the build gets delayed but I assume the original completion date for the property has to be within there normal mortgage offer (usually 6 months) term.

I am VERY reluctant to exchange on any property that I do not have a mortgage offer for. This could be financial suicide.

The builders are pushing hard for me to get an offer but rightly so no bank will give me a mortgage offer for a property that completes so far in advance. From my point of view, there is no point getting a mortgage offer if it expires before completion. That's the same as exchanging without a mortgage offer and serves no purpose. Does anyone know different?

Has anyone got any advice on what I could do?
Does anyone know the name of the company that does a 10 month mortgage offer?
Am I able to do a conditional exchange subject to me getting a mortgage offer? Is this usual and is it likely to to happen?

Any help or advice is greatly appreciated.

n90bar

Hi

I am in a identical situation as you. We purchased off plan a new build back in Dec 2011 which was to be ready for occupying Dec 12. We were given two months to exchange - which we did. As you probably know this is a very risky business because Like you we couldn't get an offer to last the 10 or so months. On the recommendation of our MA we kept our credit files squeaky clean and applied for our mortgage in Sept 2012. Unfortunately our build has been delayed by almost 6 months and as it stands we ain't going to complete until July. My mortgage offs expires this month so I've had to apply again for anew one. BTW our mortgage provider was Chelsea BS who would only extend for 10 days.

My 2 bits of advise 1. Be very very sure you will be able to obtain a mortgage and confident that your personal circumstances won't change. We did manage to get a clause inserted to the contract allowing us to pull out if there was a deterioration of the Economy a d we we were unable to obtain funding. 2. Make sure you have some sort of clause which covers delays in the build ( which very often there are) particularly with regards weather etc - we managed to get a Claus to pull out if our property is over 9 months delayed.

spags1909

Thanks for your advice.

Does anyone else have any ideas?

Many thanks in advance.