New-Build Mortgage problem...

hjdodzi

Good Evening Guys and Gals!

A situation has arisen for my partner in regards to a mortgage for a new build property that has really confused/upset us and was wanting to know if anyone knows what we can do / next steps...

A new build flat scheduled for July/August 2014. First time buyer. No scheme such as help to buy used, just a 75% mortgage required.

The housebuilder suggested to use their broker as they are apparently "specialists" in new build mortgage markets.
3 months ago, they advised a specific lender, the rates and amount was very reasonable so took them up on the offer. Obviously with the flat not built/finished until mid-2014, a renewal of the offer would be required, and the only thing that would reject any future offers would be personal finance situations etc as part of a usual credit score.

Once the mortgage was arranged, a substantial deposit was paid, exchanged and waiting for the renewal and completion!

Today, the broker informed her that the offer would only be extended by 3 months to May 2014. Apparently the lender was informed that building would be completed "Summer 2013" because of a mistake on a form by the housebuilder (even though the application happened in the Autumn last year, and though a mortgage broker who only deal with New Builds!!)

Basically, another mortgage is required, £450 is down the pan as an arrangement fee for the now useless mortgage offer, and my question to the forum is can we do anything in terms of getting the arrangement fee back from the ultimate c*ck-up by the broker, and any advice on next steps?

Cheers in advance guys and gals! :-)

Sparx

Usually mortgage offers are only valid for 6 months maximum.. If the house isn't due to be finished until July/August 2014 (7-8 months away) why did you go through with the full mortgage application 3 months ago? That's nearly a year too early! You couldn't of even got the mortgage offer extended that much.. Surely?

ethank

Was the broker, the recommended broker for the development. I would go back to the builder and the broker and let them know, and ask them to pay for the new application

hjdodzi

Sparx wrote: »

Usually mortgage offers are only valid for 6 months maximum.. If the house isn't due to be finished until July/August 2014 (7-8 months away) why did you go through with the full mortgage application 3 months ago? That's nearly a year too early! You couldn't of even got the mortgage offer extended that much.. Surely?

From what i gather... the flat could not be secured unless a deposit can be put down, and a mortgage secured. The same concern you said, we has 3 months ago! But both the builder (a nationwide "reputable" one) and the broker said the mortgage renewal was all managed by them, as long as financial situ on the applicant's end did not change then only 1 renewal is needed until completion (which is now not true!)

hjdodzi

ethank wrote: »

Was the broker, the recommended broker for the development. I would go back to the builder and the broker and let them know, and ask them to pay for the new application

The broker was indeed the recommended broker for the development. No consultation fees etc, just arrangement fee for mortgage direct to the lender etc. We did go back to builder who said they would "call the director of the broker as a matter of urgency" as it was a serious matter... (hmmmm.....)
To rub salt into the wound, the mortgage advisor who at the brokerage no longer works there... I get a whiff that we are not the only people to have this prob.

(PS, if anyone else if having problems too, PM me to see if we are on the same development in London and we can tackle it together!)

Sparx

Strange.. I'm going through a new build purchase with Redrow currently. We just paid a £500 reservation fee which 'secured' us the plot.. We were then told once we are within <6 months of the house being built we then apply for our mortgage etc to ensure the offer does not expire. Then worst case scenario is you need a few weeks extension or a month if the builders don't meet the deadline. My place is due to be built June 2014 so we are applying for our mortgage end of this month / beginning of Feb.

Sounds like your broker has gone about it rather backwards.. I would definitely do as ethank says, back to both developer & broker and insist one of them cover the cost of the new app.

hjdodzi

Sparx wrote: »

Strange.. I'm going through a new build purchase with Redrow currently. We just paid a £500 reservation fee which 'secured' us the plot.. We were then told once we are within <6 months of the house being built we then apply for our mortgage etc to ensure the offer does not expire. Then worst case scenario is you need a few weeks extension or a month if the builders don't meet the deadline. My place is due to be built June 2014 so we are applying for our mortgage end of this month / beginning of Feb.

Sounds like your broker has gone about it rather backwards.. I would definitely do as ethank says, back to both developer & broker and insist one of them cover the cost of the new app.

Thank you for this Sparx,
I thought this should have been the process, I am wondering why both developer and broker in our case is pushing for a mortgage that needs renewing... we will indeed be following ethank's advice and get the cost of a new app covered!

ethank

You should tell the builder that if they want you to buy, they need to pay. You should not have been told to apply until the right time.

kingstreet

In the last year, we've had one case which required re-writing, because the builder failed to meet the completion deadline. We planned the best we could and delayed the application until the offer would last long enough to meet the expected build finish date.

As a new application and fees were required, the builder reimbursed the buyer, in full, for the additional costs.

In the last week, we've found out two other cases are having the build completions put back and the offers will expire. These are Halifax cases and we can select a new product in each case, produce a new KFI and Halifax contacts Colleys to get the valuation refreshed free of charge. New offers have been issued and fortunately, the mortgage rates are lower and the payments have reduced as a result.

jamesml

I'd get the builder to foot the bill for you - its their recommended broker who messed up, and at the end of the day they want you to complete, so they'll make it happen.

Who have you paid your deposit to?

hjdodzi

jamesml wrote: »

I'd get the builder to foot the bill for you - its their recommended broker who messed up, and at the end of the day they want you to complete, so they'll make it happen.

Who have you paid your deposit to?

Deposit paid to builder via solicitor.

Have had conflicting info, to begin with we were initially told that a mortgage would need to be in place 30 days from putting down the deposit (told by the builder) and then told by the solicitor it was 30 days from the creation of the contracts! So much conflicting info, hard to keep track!