Buying Off Plan property

ichidan

This is somewhat related to my other topic on Mortgage lending amount (Agreement In Principle). So I figure better to be in a separate topic.

When buying off-plan via Barratt homes.

I think they wish to exchange in 28 days of reservation, and complete in about 3-6 months time.

In order to exchange, does this require a formal mortgage offer & current valuation?

Is the deposit (or partial deposit) paid ONLY if the formal mortgage agreement has been obtained?

At completion. Are you required to do an additional valuation to confirm the new property value, and confirm your new credit score before getting the mortgage? Or do you go with the formal mortgage offer and price from the exchange date?

This I'm unclear with. I've read stories of people finding their dream 'off plan' home, paying a deposit, and then 6 months later finding out that they can't secure a mortgage due to the value of the property changing, or their credit score changing. Losing their deposit. This sounds crazy.

While I've read other stories that say once exchange has been done, there is no turning back, the house is yours, as long as you pay the remaining deposit (if paid partial), the stamp duty, and the legal fees. This makes more sense.

I've also read that some people can get formal mortgage offers, exchange contracts, (presumably) paid deposit, and then only to find out that the bank was only kiddin', and retracted the offer, making you lose your deposit. Then to top it off, the Builders suing you because you didn't buy their home. This is even crazier. Surely the bank should be liable, and should be sued for wasting your time & money, and the builders time & money.

But as I understand it. After completion, there's nothing the banks can do to retract your mortgage, except of course if you fail to keep up with the repayments.