Urgent help needed......

rothers798

Could anyone tell me the answer to the following......

I have sold my house for £190,000 and put a reservation on a new build for £196,000. The new build will not be ready until May/June 2008 but my buyer needs to move asap and in anycase I need to exchange in about 4 weeks. I am happy to rent from completion in relation to my property now until I complete on my new house.

My question is in relation to my mortgage, exchange of contracts and deposits. Obviously I do not need my full mortgage until I complete on my new house but would I need one to cover my deposit and would I need to have my mortgage in place asap. The builder is paying my 5% deposit. Would I need a further 10% deposit or just the remainder 5%?

If I could get the cash together for the deposit on mine could I put off getting the mortgage until I complete on the new property?

I'm confused as you can tell!! I just hope I haven't confused everybody else!!! Lol!

Any advice would be appreciated!

apk1

Not sure what you mean with the deposit, what has been agreed with the builder 15% (5% from the builder and 10% from you) or 10% (5% from each of you), presumably if you are selling your property and moving into rented, you will have equity in your property to use as deposit.

With regard to a mortgage for completion, I doubt if your solicitor will let you exchange until you can proove you can complete, either with cash, or a mortgage offer, therefore you need to apply for a mortgage now, so the offer will be in place, the reallity is that the offer will normally only be valid for 6 months, but most lenders will extend. This also ensures that you will not be in the situation in 6 months time that suddenly you cant get a mortgage.

rothers798

Thanks very much for that, I wasn't sure whether the mortgage offer would last 6 months.

Thanks again

Jonbvn

rothers798 wrote: »

Could anyone tell me the answer to the following......

I have sold my house for £190,000 and put a reservation on a new build for £196,000. The new build will not be ready until May/June 2008 but my buyer needs to move asap and in anycase I need to exchange in about 4 weeks. I am happy to rent from completion in relation to my property now until I complete on my new house.

My question is in relation to my mortgage, exchange of contracts and deposits. Obviously I do not need my full mortgage until I complete on my new house but would I need one to cover my deposit and would I need to have my mortgage in place asap. The builder is paying my 5% deposit. Would I need a further 10% deposit or just the remainder 5%?

If I could get the cash together for the deposit on mine could I put off getting the mortgage until I complete on the new property?

I'm confused as you can tell!! I just hope I haven't confused everybody else!!! Lol!

Any advice would be appreciated!

No lender will release money until completion when they can place a charge on the deeds of the property.

In my experience, the deposit on new builds (paid at exchange) is normally 10%. Since the builder is paying 5%, you will have to find 5% of the remainder from your own money.

Your solicitor will usually insist that the mortgage is in place, before you exchange.

luckyfool

rothers798 wrote: »

Thanks very much for that, I wasn't sure whether the mortgage offer would last 6 months.

Thanks again

Lenders such as Halifax offer New Build exclusives where the offer can be valid for 12 months.

Nationwide will extend their offers as a matter of course on same rate for New Builds. I know of one instance where a client completed on a 2 year old Nationwide application on a fixed rate 1.5% better than was available in the market at the time of completion.

You should not necessarily need to pay a deposit at the time of exchange, the standard practice on new build is you paid £100,£1000 or something along those lines when you reserved the property. Normally nothing further is paid at exchange, but remember you are legally committing yourself to the purchase so you should make sure you have any mortgage and deposit funds confirmed as available so that you can complete when required otherwise you could have problems later.