Exchanging contract for a new build due to complete in a year

lilaczoey

Hi all,

My partner and I have reserved a new build flat off-plan. Since I'm on a work visa, there's currently only two lenders that will lend to us, and since we have to wait until next year to apply for a mortgage (because the anticipated completion date is mid/late summer 2016), there's no way we can be sure that we can secure a mortgage jointly before we exchange contract (say, if the lending criteria changed between now and then).

We want to be sure that we don't lose our 10% deposit, and our Plan B is for my partner to apply for a mortgage by himself and complete by himself (even though this is really not preferred). However, my solicitor said that if we sign the contract jointly, then we will be bound to complete jointly. She also said that the developer will not allow reassignments, and the only other option would be for my partner to sign the contract himself, and add my name to the contract before completion. But since it's always our intention to buy jointly, we're not sure about this. Is there any way around this?? Any advice would be much appreciated!

Many thanks!!

Adj29

How can you exchange without a mortgage offer? I didn't think it was possible unless you was a cash buyer.

Richard_Webster

Not worth the risk - buy something else that is finished.

lilaczoey

The developer made us speak to their mortgage advisor before we reserved. They don't seem to have any problems with us applying for a mortgage after contract exchange (i guess because they don't have much to lose?)

lilaczoey

Richard_Webster wrote: »

Not worth the risk - buy something else that is finished.

Would it be possible to add something to the contract that will allow us to remove a name in case we need to? (or reassign the contract from the two of us to just my partner alone?)

FYI, we are using the solicitor recommended by the developer. Would it make a difference if we find an independent solicitor?

Lungboy

Once you exchange you're legally bound to buy the property. If you can't get a mortgage once it's time to pay, you're in trouble. It won't be the developer or their mortgage advisor that's being sued, it'll be you.

lilaczoey

Lungboy wrote: »

Once you exchange you're legally bound to buy the property. If you can't get a mortgage once it's time to pay, you're in trouble. It won't be the developer or their mortgage advisor that's being sued, it'll be you.

I completely understand, and we think it shouldn't be a problem if my partner were to apply for a mortgage alone (our Plan , but since no mortgage lender will allow me being a joint-owner in that case, we want to make sure that we'd be able to take my name off the contract and for my partner to complete by himself.

ognum

lilaczoey wrote: »

I completely understand, and we think it shouldn't be a problem if my partner were to apply for a mortgage alone (our Plan , but since no mortgage lender will allow me being a joint-owner in that case, we want to make sure that we'd be able to take my name off the contract and for my partner to complete by himself.

Why do you want to be included on the mortgage? You are on a work visa, if you lose your job you will have to return to your country of origin, why would you want a mortgage in another country at that time.

If you marry then all your assets will be combined anyway so you will 'own' a share of the property.

I would go for the safe option of your partner getting the mortgage and having a greater market choice so probably a cheaper repayment vehicle.

libf

Wait until you've got the mortgage offer to exchange.

I reserved in May, but didn't apply for my mortgage until the end of July because the house I reserved isn't finished until January.

lilaczoey

libf wrote: »

Wait until you've got the mortgage offer to exchange.

I reserved in May, but didn't apply for my mortgage until the end of July because the house I reserved isn't finished until January.

And the developer was fine with not exchanging contract within a month?

In our case we'll have to wait until maybe March 2016 to apply for a mortgage so i'm not sure the developer will allow us to delay contract exchange by that much.

libf

lilaczoey wrote: »

And the developer was fine with not exchanging contract within a month?

In our case we'll have to wait until maybe March 2016 to apply for a mortgage so i'm not sure the developer will allow us to delay contract exchange by that much.

We didn't actually exchange until a week ago... The salesperson said that because of how early they were being put up for reservation it wasn't an issue to wait until ~6 months before so as not to have to mess around with extending mortgage offers.

I got the first letter demanding exchange in August, then another in September, and then one threatening to re-market if I didn't exchange by October 16th. I just kept the salesperson up to date on the issue (firstly that the developers solicitor hadn't sent the required paperwork, and then that although my solicitor was ready to exchange, theirs wasn't responding despite the HTB being about to expire...)

They did mention exchanging but with some sort of caveat that it didn't count if I didn't get a mortgage offer, but at that point I was just waiting for the offer paperwork anyway.