Mortgage issued with retention, advice needed

AnnieBox

Hello everyone. I'm just curious about my recent mortgage offer, my partner and I are first time buyers and we don't fully understand what the below means for us so we were hoping for some answers. I have an appointment with my broker to go through it but I was hoping to get some answers as I'm a bit of a worrier!


It says on the Valuation Report “Any repairs recommended as a condition of the mortgage or an engineer’s report required?” He has ticked yes. His description for for selecting yes is as follows:

• Instruct a roofing contractor to inspect roof coverings and carry out necessary repair/renewal.
• It is recommended that a specialist report from a PCA (Property Care Association) Registered damp/timber firm be obtained upon the extent of rising damp and condition of sub-floor and adjacent timber before Exchange of contracts.

Under Recommended retention, he has stated the numerical amount of £3,000.

At the bottom of the page he has listed his value at the time of inspection and he has valued the property currently at £122,000. He has stated that it will be classed as £125,000 on completion of the repairs/inspections as detailed above.

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I know that there was some work done on the roof of the house to fix a couple of leaks previously as the repaired parts are visible but I don’t know if the seller has any record or anything to certify the repairs. I did have a knowledgeable friend view the house as well and they have said there are no signs of damp or anything to worry about.

What does this valuation mean for us? Does the work have to be done before they will release the mortgage, or can we just see if the seller will drop the price and just proceed at the lower value?

As first time buyers we feel a bit lost right now, it may be an obvious question but I just really don't know. I'm just panicking a bit because I know the seller is really keen for a quick tying up of things as a previous sale fell through and the house is currently unoccupied so they are paying for a home they don't even live in! I don't want to risk things taking longer because of having to get work done as I fear it may lose us the house

Any advice very much appreciated

spidereyes

AnnieBox wrote: »

It says on the Valuation Report “Any repairs recommended as a condition of the mortgage or an engineer’s report required?” He has ticked yes. His description for for selecting yes is as follows:

• Instruct a roofing contractor to inspect roof coverings and carry out necessary repair/renewal.
• It is recommended that a specialist report from a PCA (Property Care Association) Registered damp/timber firm be obtained upon the extent of rising damp and condition of sub-floor and adjacent timber before Exchange of contracts.

Under Recommended retention, he has stated the numerical amount of £3,000.

At the bottom of the page he has listed his value at the time of inspection and he has valued the property currently at £122,000. He has stated that it will be classed as £125,000 on completion of the repairs/inspections as detailed above.

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What does this valuation mean for us? Does the work have to be done before they will release the mortgage, or can we just see if the seller will drop the price and just proceed at the lower value?

In basic terms a mortgage retention means that part of the mortgage will be retained "held back" by the lender pending the recommendations being met. Usually you will have to pay for (you may be able to get Vendor to meet the cost) for the inspections to be carried out and then this report needs to be provided to your solicitor. Your solicitor will then send this on to your mortgage lender for them to review and confirm if they are satisfied to release the remaining funds. I note that this specifically states before exchange of contracts (sometimes works etc can be carried out between exchange and completion), therefore the sooner the reports are carried out the better.

You can of course renegotiate the price but note that you will need to inform the lender of the revised purchase price, they may simply accept the reduced price and agree to proceed without a retention but depending on the LTV value they may wish to retain a lower retention value.

Thrugelmir

AnnieBox wrote: »

• Instruct a roofing contractor to inspect roof coverings and carry out necessary repair/renewal.
• It is recommended that a specialist report from a PCA (Property Care Association) Registered damp/timber firm be obtained upon the extent of rising damp and condition of sub-floor and adjacent timber before Exchange of contracts.

The surveyor has concerns over the issues above and suggests you as the buyers take a closer look. Might be nothing however might require repair. Would you buy a second hand car without a mechanical report?