Help 2 Buy / completion question

monkeyman905

HI,

Im looking for some advice me and my girlfriend are looking to get a new build with the goverments help to buy scheme. The property wont be complete till December and we have been offered a mortgage. What i wanted to know is what would happen if i lost my job before the completion of the house?? Would there be any penaltys?? Can we get out from having to take the property on?

Thanks

Phil

Thrugelmir

The mortgage offer may well lapse before the property is complete, so you would need to reapply. Under these circumstances your solicitor would advise against exchanging contracts.

monkeyman905

Thank you for the replay, so are you saying my solicitor should advise not to go ahead now, or nearer the time if either of us lost our jobs?

kingstreet

You have two different issues here.

The first is the completion date. If it is more than six months ahead, you would be advised not to make an application for a mortgage or to the HCA HomeBuy agent until you are within six months, as that is typically the longevity of both a mortgage offer and your HTB Authority to Proceed.

Completion in December should mean an application in June at the earliest, preferably July.

On the unemployment issue, if you lose your job you are required to report such a change in circumstances to your lender. They will probably withdraw your offer. If this happens before exchange of contracts, you will lose any mortgage and legal costs/fees you have paid. The builder should refund your reservation fee in part, if not in full.

Your solicitor should insert a clause in the contract permitting cancellation if you lose your job between exchange and completion, as such an event could see you liable for a large amount of costs for a breach of contract suit from the builder. Typically, you'll be required to exchange quickly, with completion on notice for the build being finished. This can be a long period, upto six months, as mentioned and anything can go wrong in that period.