Mortgage retention and price negotiation

Strummer22

Hi all,

I'm buying a house and got an amended mortgage offer today: retention circa £3500 due to damp problems and remedial work required (as detailed in a damp and timber report the lender requested).

I have two questions:

1) the offer says this money will be retained until either their valuer confirms that the work is complete, or until a suitable guarantee has been supplied by the contractor.

Who is 'the contractor''. Is it any contractor we pay to do the work? Or does it have to be the contractor that provided us with the original damp and timber report?

2) The more important question. Obviously we have a solid figure with which to renegotiate the purchase price. In the wonderful, hypothetical world in which the seller is willing to drop the purchase price by £3500, what happens next? In my mind, the following happens:

i) The new purchase price is agreed. We tell our lender the new purchase price.
ii) They issue a new mortgage offer, for a lower amount, but presumably still with a £3500 retention?
iii) We still need to find this extra £3500 to add to our deposit (seeing as the lender won't release it), and find an extra £3500 to do the work and satisfy the lender so that they release the retention.

In the long run, it's as if we paid the original purchase price. But in the short term, we need to find an extra £7000 :eek:

Have I got this right, or have I misunderstood anything?

foxy-stoat

Depends on your current deposit and LTV %


The lender will release the £3500 once the work is done and signed off by the surveyor so use a credit card to finance the work.

Whistler23

Did you get a damp and timber report, or a damp and timber quote from a so called specialist...read salesman...

I just got an independent damp and timber survey done, it knocked off £8,000 from the so called damp experts estimate.

Strummer22

I got the report from an independent surveyor.