New Build Timeline clarification?

SuboJvR

Hi all,

I'm getting a bit confused for when to do what - new to all this stuff - can anyone lay it out for me?

We have provisionally reserved a new build - have completed the paperwork, but have not given the reservation fee yet.
Reason being that the developer will only be applying for HTB on that house in July. Once the allocation comes through, we will pay our reservation fee.
We have been advised that the completion should be October-November.

On their advice I contacted a solicitor and have opened a file.
We have also got a mortgage offer in principle and credit check passed.
The only other thing time-wise is that the money we will be using for deposit will only be available by 1st August. It may be earlier (pension commutation). Developer and lender aware.

What happens next?

I'm not sure if we should start the formal mortgage application process at this stage, or should I wait until after the HTB allocation?
On the one side I would like to get it done to ease my anxiety levels but on the other I am aware that once an offer is made it only lasts six months. And it may be premature to do it prior to the HTB allocation.

So would it be..

HTB allocation
Mortgage application
Instruct solicitor

Or is there any harm in applying for the mortgage say, last week of June - if the HTB allocation for any reason doesn't happen then we wouldn't be buying anyway?

Due to the deposit money only being with me by 1st August I don't want to be too prepared in July and start the clock rolling on their 28 day timeline or whathaveyou for exchange although in reality it should all be fine!!!

I hope this all makes sense, thanks in advance folks.

kingstreet

SuboJvR wrote: »

Reason being that the developer will only be applying for HTB on that house in July

Why is this?

SuboJvR

Whether true or not, they say the allocations/applications happen quarterly and July goes into their next financial quarter.

Another developer we were looking at advised the same.

I am thinking more likely they want to push the sale into the next calendar month for whatever their reasoning for their own figures.

As mentioned though, since our deposit won't be ready 'till 1st August in a bank account we wouldn't be able to commit to exchange until early-mid August so I didn't think too much of it. Our timelines seemed to converge.

kingstreet

This is our HTB Equity Loan process;-

Check HCA Affordability Calculator
Obtain agreement in principle
Preliminary reservation done with builder and solicitor selected
Property information form and reservation submitted to HTB Agent
HTB - EL Authority To Proceed issued (ATP)

All the above is done in the first week.

Full mortgage application submitted
Lender valuation done and supporting docs submitted
Mortgage Offer issued
Solicitor submits Authority to Exchange (ATE)
Contracts exchanged with completion "on notice" when build over

All of the above is done within 28 days of ATP issue.

Property finished and kitted out to buyer's spec
Demonstration visit and snagging inspection
Notice given
Solicitor submits Forms 1 & 2 for Equity Loan release
Completion takes place, keys and money change hands and mortgage payments commence.

You have three months to exchange contracts from issue of ATP and another six months to complete after issue of ATE and extension is possible.

kingstreet

AFAIK the HCA does its HTB Equity Loan funding allocations end of March beginning of April for all builders for the fiscal year. The builder's Year-End has no relevance, or none I've heard of, in our four years managing the scheme for four different builders.

SuboJvR

Interesting.

Thank you kingstreet.

Thank you also for providing the timeline - makes a lot of sense now for me.

Honestly not sure what their rationale is, but it doesn't really matter to us as had we reserved already we wouldn't have the deposit in time to exchange. Perhaps I have misunderstood and they are bending their standard practice slightly to accommodate us instead, and hence avoid a lengthy reservation-exchange time period?

Or possibly they wonder if there may be delays during the build of this particular property...!

RainbowLily

When we applied for HTB, we did that through our solicitor, not the housebuilder.
HTB then were the ones that pretty much told us when we could do things. We got authority to proceed on each step of the process from HTB.
We couldn't apply for the mortgage until we had proof of the HTB either!

Mortgage providers will normally extend if you ask them, although they could change the terms.
We told the housebuilder that we wouldn't apply for the mortgage until there was less than 6 months to go on the build.

They also allowed us to not pay anything other than the £500 reservation fee until completion. If their solicitor agrees, there's no need to worry.

Hope that helps!

SuboJvR

Thank you it does.

We're going to the development at the weekend to discuss our option choices so I will take the opportunity then to ask who exactly deals with the HTB. The solicitor seems to have an extra charge for it but the developer said they would handle all the paperwork too. So confusing.

kingstreet

We handle the submission of Property Information Form and Reservation to the HTB Agent for our clients.