Change of circumstances and mortgage offer withdrawal

Rainbow3

Hi all,

hoping someone can help- please be kind this is not a planned situation...apologies for long post...

We exchanged contracts on a new build in December 2016, It is due for completion May/June 2017.
I have recently discovered I am pregnant- this will be my 3rd child all under 5 years old. Unplanned situation so obviously not declared on mortgage application. This will have significant impact on our income/outgoings with maternity leave and another child in daycare. I may also have to look at reducing my work hours but that is not something we have looked at in detail yet. Our obvious concern is that this change will mean our mortgage offer will be withdrawn (there is also the concern as to whether we can afford it).

Reviewing our contract of sale there is a section with regards to conditions that must be met to complete which states:
"This contract is conditional upon the buyers original mortgage offer from a Qualifying lender remaining valid (or the buyer obtaining a replacement mortgage for the equivalent amount....if the conditions are not satisfied as at the date of completion the buyer or seller may terminate the contract by serving written notice to that effect on the other (clause50)

"If this contract is terminated under clause 50 the deposit shall be immediately returned by the seller to the buyer together with interest accrued on the deposit"

Does the above mean if the mortgage is withdrawn we would not be sued/builder keeps our deposit? I am petrified this is going to ruin us :-( any advice would be appreciated....

ReadingTim

This appears to suggest that if at the date of completion you don't have a mortgage in place, either you or the developer can pull out of the sale (terminate the contract under clause 50), at which point the developer returns your deposit plus and interest accrued.

I don't see how you can be sued, or how they'd keep your deposit; however, how 'deposit' is defined isn't stated. You probably won't get back the full amount you paid out, but you shouldn't lose it all either.

Rainbow3

Thank you for your reply...I hope so Tim, so anxious about speaking to solicitor/Broker- we are taking this week to get our head around things and then preparing to face the music. We are so disappointed as we loved the house :-(

casper_g

If you're concerned about affordability you're right to consider your options, but I would be surprised if the mortgage offer would be withdrawn on the basis that you are pregnant. How would the bank even know?

Rainbow3

Thank you for your reply - As it's a significant change in circumstances (financial and personal) I was under the impression that I had to declare it or would be committing fraud? but yes we also have to look at the practicalities and if we can afford as income will be significantly reduced while on maternity and outgoings significantly increasing upon return to work as two would be in daycare... costing more than a monthly mortgage repayment!

casper_g

That may be strictly true, but on previous threads many were of the view that lenders didn't need to know....

https://forums.moneysavingexpert.com/discussion/4994735