Mortgage for off plan new build

sturgeon

My broker is applying for a Halifax mortgage, apparently the offers can be valid for 9 months in these situations.

I have to put a 5% deposit down in the next couple of months and exchange, whilst the property is completed in January next year.

My broker says this is perfectly normal. I am paranoid that the lender could withdraw their offer. However, what reason would there be for doing that? Am I worrying needlessly?

libf

The main reason would be if you lost your job, I should imagine. But it's the way it is with buying off plan; developers want you to exchange so you're committed and if you don't then someone else will.

That said, I reserved in May but won't be applying for a mortgage until August because nationwide offers are for ~6 months and my place won't be ready until Dec/Jan. I intend to ask my solicitor about putting a clause into the contract that makes it lapse if we've not completed within the time frame of my mortgage offer (once I've got one!) although I don't know how successful I'll be with that... And even then it wouldn't help if there's a chance if circumstances that means any mortgage offer is withdrawn...

kingstreet

libf wrote: »

I intend to ask my solicitor about putting a clause into the contract that makes it lapse if we've not completed within the time frame of my mortgage offer (once I've got one!) although I don't know how successful I'll be with that

You won't.

You may get one which agrees to terminate the contract if you are unable to get another mortgage if the build completes later than anticipated.

Teqpro

SNAP! except i paid my deposit and it will complete in November. I'm not worried very excited and if the lender (Halifax) withdraws then it wasn't meant to be.

sturgeon

Great advice, thanks guys.

Jon_B_2

Teqpro wrote: »

SNAP! except i paid my deposit and it will complete in November. I'm not worried very excited and if the lender (Halifax) withdraws then it wasn't meant to be.

It's not quite as relaxing as that. If the lender withdraws their offer and no subsequent lender will provide the money you run the risk of losing all of your deposit and liable by the developer for loads of legal costs.

Exchanging contracts means you are legally bound to purchase the property, if the funds disappear what are you supposed to do?

I exchanged just over a week ago for completion end of October. I'm relaxed, but still tense.