the lunacy of buying off plan

betmunch

They may well want that, and as long as people buy under those circumstances they will continue to do it.

My point is that its not the lenders fault, they want things concluded in 6 months, its the developer thats not being reasonable in my book. They still get paid on the same day whether theres 1 day or 1 year between exchange and completion.

I have a client in the same situation as you were, I have explained the risks and she still wanted to proceed. I am not looking forward to june when we restart the application process!

lucie_1985

My risk was slightly different but no less difficult, we exchanged on the basis of a promise that my parents were to gift us an amount which never materialised even though the mortgage offer was still valid. We had put down 10% to exchange but required the other 15% as a requirement of being a new build.


In the interim period my father in law passed away very suddenly and my husband inherited part of his property which was sold just in time for us to complete.

kingstreet

We're fortunate that our builders understand we won't submit a mortgage application for a client until within the period in which the build will be finalised.

At the moment we have a couple of applications waiting until next week for submission as the build end-dates are into November.

They accept they won't get exchange within 28 days of reservation.

zarf2007

Thanks all, can any of the brokers answer the question in the last part of my post re MMR & BTL?

betmunch

In my opinion theres a general nervousness with BTL lenders. Especially if they think you or a relative will live there.

A few will drag the underwriting process out, analysing your whole situation, which is fair enough where thats their criteria.

While others will concentrate more on the BTL unit and less so about the background.

Hope that helps

kingstreet

Not a lot to do with MMR, but lender are anxious to ensure the BTL affordability guidelines aren't being "gamed" by those wanting to buy a new home for themselves who wouldn't pass residential affordability calculations.

Hence, you see minimum personal income requirements; lenders who don't lend to those who don't own their own home and so on...

Thrugelmir

zarf2007 wrote: »

on a serious note, has the MMR regulations affected BTL at all? I realise BTL mortgages are unregulated but have heard that lenders doing both residential and BTL are likely to be more stringent with their BTL lending as overspill from the MMR on residential mortgages.

BTL lending can be both regulated and unregulated. Lenders will be enforce the appropriate rules according to regulatory requirements. MMR may be new but the contents are really old hat. Forcing the lenders to act responsibly as they once did on their own accord. It's peoples addiction to debt and leveraging up with same that's now the bigger problem.

airyfairy76

I've bought off plan and reserved in February with a completion of August / September. I had no issues with my mortgage application being submitted no more than six months ahead, and will probably exchange in the next couple of weeks. So I think it very much depends on the builder and also the site perhaps too.

Jon_B_2

Yeah, we reserved our new build house in January and we are not exchanging til end of May for November completion.

zarf2007

Jon_B wrote: »

Yeah, we reserved our new build house in January and we are not exchanging til end of May for November completion.

and this makes perfect sense to me. I have gone back to the builder and they are considering allowing me to do this but if they refuse then I will walk away as I am not risking the loss of £36K+ by exchanging without a mortgage in place.

The bizarre thing is both my broker and solicitor (other than a warning about losing the deposit) don't see an issue with this and the broker has said that many others who need a mortgage to buy from the development are willing to exchange without it being in place.

I really can't see how the solicitor can stand by and let me exchange without a this being in place, what happened to protecting their client?