Mortgage Retention

bella1975_2

Hello,

I am looking for some advice as a first time buyer.

We have a mortgage agreed for 90% LTV on a property as first time buyers.

The survey suggested a £7000 retention which the mortgage company (Abbey) have enforced. Offer on property was £220,000, mortgage company has valued the property at £213,000 without the work suggested being completed.

I understand that they will not release this money until work highlighted is completed - my question is, if we chose to go ahead with purchase and do not complete the work within 6 month period can they withdraw the mortgage?

Sellers are not willing to reduce price although we are trying to resolve some of the issues and have arranged a builder to give a quote on work needed to see if the mortgage company will reduce retention.

This is all very new to us and confusing! Any advice around retentions?

Thanks!

Thrugelmir

bella1975 wrote: »

I understand that they will not release this money until work highlighted is completed - my question is, if we chose to go ahead with purchase and do not complete the work within 6 month period can they withdraw the mortgage?

No, the lender withhold £7k until the works are completed. So you'll need to fund the work either to release the funds or pay for it entirely yourselves.

Building_Surveyor

Get a quote and start from there. if you can't afford it or think its too much hassle, then pullout. If you do not get the work done in 6months the vendor is likely to pull out, would they really wait that long for you to faff about, I doubt it. and secondly you will still be 7k short from the mortgage.

If the vendor is not up for negotiating then the only other option is to stump up the cost for the works.

In terms of reducing the retention you will need to get various quotes from builders, it is up to you to prove the real cost of the work. Just remember a cheap fix might not always work out for the best in the long run.

Either way, weigh up your options, seek professional opinions about the work and make an informed choice. And Remember there will always be other houses if need be.

amnblog

The property was valued at £213,000 as it stands.

You are being asked to pay £220,000

Somewhere there is a message?

bella1975_2

Thanks for your replies.

No I will not be expecting the vendor to wait 6 months, just a bit worried that it would impact on mortgage if after we had completed we didn't complete the works in months.

I am not prepared to pay £7000 over the 'valuation' but do not feel the £7000 retention is equitable with the work required hence requesting the builder quote and renegotiation with vendor and mortgage company depending on outcome.

Thanks again, really didn't believe the process could be this stressful!

witchy1066

the mortgage company's give you up to 6 months to get the work completed, that is what we have been told,

could someone clarify please

am I right or wrong in thinking, if this is a FTB the vender has to wait until he gets his money, or reduce the original agreed price, or decide not to sell, or pay to get the work done ,
or
do we the buyer have to put the money up front and still pay for the work,??

Building_Surveyor

witchy1066 wrote: »

the mortgage company's give you up to 6 months to get the work completed, that is what we have been told,

could someone clarify please

am I right or wrong in thinking, if this is a FTB the vender has to wait until he gets his money, or reduce the original agreed price, or decide not to sell, or pay to get the work done ,
or
do we the buyer have to put the money up front and still pay for the work,??

Don't have a clue what your on about sorry, your asking about 6 questions in 1 as well as hijacking someone else thread. Your going to have to clarify as I'm not sure what your asking?? Forget about being a FTB makes no odds when a retention is concerned.

witchy1066

so sorry , I thought I was asking the same question as Bella

Any advice around retentions?

will ask elsewhere

hcb42

If they will only lend £213, and the vendor will not drop the price, then you need to find the additional £7K or the sale cannot go ahead.

The vendor does not wait for anything. You would need to find the money if you want to purchase.

Most vendors would probably think the sensible thing to do is drop the price, otherwise the next buyer is more than likely going to have the same issue. Whether they can actually afford to drop the price or not, is another matter of course.

If you managed to buy it and didnt do the work then it would mean you would not be able to borrow that final £7k (Which you will have already shelled out anyway if you buy at the original offer price, so it would be academic - ignoring the risk of not carrying out the work itself of course!)

Building_Surveyor

witchy1066 wrote: »

so sorry , I thought I was asking the same question as Bella

Any advice around retentions?

will ask elsewhere

Probably best to explain your circs in your own post and explain exactly what you've been told? If its about the mortgage funds post on the mortgage board or if its about the house/repairs go on the house buying one

wannahouse

why not exchange, and then pay to get the works done before completion, with the vendors permission, so you can still get the mortgage for the full amount?