6 weeks to mortgage expiry, what should I do?

dancing_star

Before I speak to my solicitor & mortgage adviser tomorrow, I thought I'd ask opinions in case there's anything I've not thought through, in my panic.

I have sold my place, and have the money sat in my solicitor's clients' account. Currently in rented, AST expired but the notice period is the least of my worries.

I had an offer accepted on a property on 2 June. Mortgage agreed at 2.41% fixed for 5 years, expiry 16 December. Deposit 27%.

From the off the vendor has been difficult to get hold of, the EA had a nightmare contacting her. After a summer of inactivity her conveyancers sent a contract through to my sol on 1 September. It was unsigned and incomplete (1 page missing) and wrong in places. Sol sent it back. Finally got a contract back mid October. Three snagging issues:

1) Fensa certificates missing. Two weeks ago, the EA promised me the vendor had promised him she had paid for replacements. They should come through in days.
2) It's on an unadopted road, with no right of access, although there is aright of way on the lane along the back, where the parking is. My sol wanted an indemnity policy, the vendor's conveyancers said no need as there is ROW at the back. My sol points out the address is the unadopted road and that is how the postie gets there.
3) the garden is overgrown, having not been touched since tenants moved out in spring. Hedge preventing access to side of house. I argued it was vendor's fault for faffing around. Vendor agreed to sort it. It hasn't been done.

I've viewed another few properties and not found anything i like.

Last week I had had enough and told my sol and the EA to tell the conveyancers they had til Friday to come up with the goods. The conveyancers won't answer phone or reply to my sol's emails. EA managed to contact conveyancers Friday, they promised to ring back with update and didn't.

I had booked another viewing for Saturday and told EA this. I really liked the house and am now prepared to make an offer. It's on at £10k more than my agreed purchase, but as it doesn't need any work (I'd budgeted £20k for the first house, a fixer upper) I can afford to go up to 37.5% deposit if I paid asking price.

Second house is currently tenanted (eek) but the vendor promised the tenants were moving out 14 Nov to another property managed by the EA who is marketing it.

Luckily, I work right next door to my mortgage adviser. My salary has gone up since my first offer accepted, but I'm aware that with interest rates going up if I need a new mortgage offer I will not in all likelihood get such a good rate.

So, me being a bit gobby and impetuous, I'm tempted to contact the first EA tomorrow morning and get them to tell the vendor and useless conveyancers they have until 1pm to come up with an indemnity policy and an exchange date, or I am offering on the second property. And I'm prepared to do that.

I will offer on second property, and will offer near asking price as long as vendor gets info to my sol this week, so can get searches off asap. Searches (same LA) took two weeks for the first property.

What do folk think? Am I likely to get second property completed before 16 December? With an increased deposit will I need new mortgage app anyway? I know I can talk to advisers tomorrow but I've hardly slept worrying, so ideas on anything I haven't thought of would be welcome.

RedFraggle

You'll need a new mortgage anyway most likely.
I wouldn't worry about Fensa certificates myself either. Or the other issues tbh but others may disagree.
I would progress with whichever house you prefer.

quotememiserable

I don't think the second house will go any faster than the first one, some snags or other will show up. The three issues on the first all seem quite minor, you could just go ahead despite them.

Debtslayer

The problems on your snag list for first property are minor IMO. But everyone's different. If you really want the house then I would get it all done ASAP, you may have to compromise on the 'problems' to achieve this.
Or do you now really want the second house?
You need to decide which house you really want and go with that

dancing_star

You'll need a new mortgage anyway most likely.

That's what I was afraid of.

quotememiserable wrote: »

I don't think the second house will go any faster than the first one, some snags or other will show up. The three issues on the first all seem quite minor, you could just go ahead despite them.

The three issues seemed minor to me, and I'm not fussed about the FENSA certificates especially as I've seen online that they exist. But my solicitor said that unless the vendor pays for the indemnity over the ROW then I will need to pay for it. Not sure why, tbh, as I don't like to pester them with daft questions.

Another part of me is being bloody minded, I think that the vendor is being tardy over these issues so she doesn't have to pay and hopes I'll get desperate and fed up enough to pay for them myself. But she has been so useless that I don't see why I should.

The other thing is that they are all so slow that even if they do agree an exchange date I can see it not happening due to their inactivity.

I'm not sure which house I prefer tbh. They are different but both lovely in their own way. I'm so stressed with it I can't think clearly any more.

Debtslayer

Think you need to write yourself a list of pros and cons for each house. You say house 1 is a doer upper, how much will it cost to do up?
How does that compare to house 2?
What is the cost of the indemnity? Is it really worth getting stressed over and losing house if you really want it?
If you remove the obstacles of the problems can you all agree an exchange date?
If you pull out now you're back to square one and could end up with same problems all over again

anselld

Items 1-3 are not reasons to abort a purchase if you still want the property. Just tell your solicitor you are willing to accept the risk and to proceed with exchange.

dancing_star

Debtslayer wrote: »

Think you need to write yourself a list of pros and cons for each house. You say house 1 is a doer upper, how much will it cost to do up?
How does that compare to house 2?
What is the cost of the indemnity? Is it really worth getting stressed over and losing house if you really want it?
If you remove the obstacles of the problems can you all agree an exchange date?
If you pull out now you're back to square one and could end up with same problems all over again

Thank you all. This is helping me to see things clearer and I do appreciate it.

House 1 will need at least £20k spending on it. I had been really looking forward to it, but now I'm dreading moving into a house with no boiler just before Christmas, and having to wait for all the builders etc to have a window to do the work! I need to have the floors sanded, an internal wall knocked out, another one rebuilt, a boiler and a new kitchen put in before me and my cats can move in.

Like I said, part of my worry is even if I do say stuff it I'll accept without the snagging issues sorted, they will still faff around and pull the silent treatment and just not bother themselves.

Whereas house 2 is ready to move into. But it looks like I'd need to reapply for mortgage.

Aaaagh!!

bowlhead99

A house is a long term commitment and the most expensive thing you can buy.

So, you should make sure you buy the right one. Whatever you have paid or time spent on searches etc for the first property is sunk cost and dead money - what it has bought you is the ability to be quite close to exchange with that particular house with relatively few snags. However, if it is not the house you prefer (taking into account both the property itself and what its price means for your finances) you shouldn't buy it. As you are currently on a month to month tenancy you are not going to be homeless if you give up on it. Don't spend hundreds of thousands of pounds just to avoid annoying the apathetic vendor and their agents/ conveyancers.

Just beware that even if the other property accept your offer, lots of things could go wrong. There could be a £20k problem revealed by survey. The tenants could refuse to move out after all, and need to be evicted after trashing the place. It could take you the same six months to make all progress necessary towards exchange and then you get gazumped. Statistically, a decent proportion of sales do fail for whatever reason.

Still, as this is a money saving site my main point to ask about is the finance side. You said:

dancing_star wrote: »

Mortgage agreed at 2.41% fixed for 5 years, expiry 16 December. Deposit 27%.
...
Luckily, I work right next door to my mortgage adviser.
...
, but I'm aware that with interest rates going up if I need a new mortgage offer I will not in all likelihood get such a good rate.

So, on your first mortgage offer you are in the 60-75% LTV band which is respectable.

Do you have any particular personal circumstances that are causing you to need a mortgage broker/advisor rather than just going direct to a high street bank or building society? E.g., you have bad credit history or you have complex self-employed income or you have massive outgoings giving you really tight affordability for the given level of gross salary. Or were you just bamboozled by the large number of deals on the high street and you work next door to a mortgage advisor so decided to buy their service?

I had a mortgage offer at 1.99% for a five year fix at that level of LTV with Nationwide just a few weeks ago. If I wasn't an existing mortgage customer it would have been 2.04%. Both those figures were lower than they would have been if I hadn't paid a fee upfront - a first time buyer with no fee would have been 2.24% (though on my amount borrowed it was worth paying the the £999 up front to get the lower rate). But under 2.41% in the high street is certainly do-able if your deposit's 25% or more. Those rates are still on Nationwide's website.

So, *if* base rates tick up by 0.25% next Thursday and Nationwide's five year fix doesn't tick up by quite as much as that (because the fixed rate offers already take into account a range of things that could happen to Bank of England rates over the term) you may find you can still mortgage at 2.4%ish in November or December simply by using a different lender to what your advisor set you up with. If you are ambitious you could try to get Nationwide (or other rival) to give you a decision in principle or outright offer on property 1 or property 2 right now.

Am I likely to get second property completed before 16 December?

Don't think I could say 'likely' but six weeks or so is possible if there is no onward chain and you don't mind a short exchange-to-completion period and the stars align.

With an increased deposit will I need new mortgage app anyway?

While a decision in principle can be on a general basis without a named property - your actual application was against this specific address. The lender assesses both you and the property when you do a formal application, valuation etc, taking into account your income and creditworthiness and what your outgoings would be (e.g. what's the monthly council tax bill on the property etc). If you want to borrow a different amount on a different property (even if it's a cheaper property) expect to sign more paperwork.

dancing_star

bowlhead99 wrote: »

Do you have any particular personal circumstances that are causing you to need a mortgage broker/advisor rather than just going direct to a high street bank or building society? E.g., you have bad credit history or you have complex self-employed income or you have massive outgoings giving you really tight affordability for the given level of gross salary. Or were you just bamboozled by the large number of deals on the high street and you work next door to a mortgage advisor so decided to buy their service?

I had a mortgage offer at 1.99% for a five year fix at that level of LTV with Nationwide just a few weeks ago. If I wasn't an existing mortgage customer it would have been 2.04%. Both those figures were lower than they would have been if I hadn't paid a fee upfront - a first time buyer with no fee would have been 2.24% (though on my amount borrowed it was worth paying the the £999 up front to get the lower rate). But under 2.41% in the high street is certainly do-able if your deposit's 25% or more. Those rates are still on Nationwide's website.

So, if base rates tick up by 0.25% next Thursday and Nationwide's five year fix doesn't tick up by quite as much as that (because the fixed rate offers already take into account a range of things that could happen to Bank of England rates over the term) you may find you can still mortgage at 2.4%ish in November by using a different lender to what your advisor set you up with. If you are ambitious you could try to get Nationwide (or other rival) to give you a decision in principle or outright offer on property 1 or property 2 right now.

Thank you so much for the detailed reply.

I did have a complex issue at the point I applied for the mortgage - I had my previous property then, with a tenant in. Tenant was given notice and vacated (owing arrears, grr) shortly after AIP. I sold the property relatively quickly, however at the point of getting the mortgage offer, I still had the property and NatWest were the only ones willing to lend me that much money without me having sold it. I do know they disregarded the mortgage payments and the rental income from the financial calculations though.

So now I am mortgage free I guess that would widen my option of lenders.

The brokers had been recommended to me (I work in financial services) and they recoup their fee from the mortgage provider rather than charging upfront. I know them anyway as like I said I work next door. And I just have not got the time or patience to approach all the high street lenders myself.

However, you do reassure me that now my finances are less complex (rid of the old place) I might get a similar deal anyway if the current one expires.

I think I will stick to the plan and give them til lunchtime tomorrow to get their act together. My dad thinks there's something a bit 'off' about it, how they've been stalling. Yet the EA assured me they want to go ahead with sale.

I'd be happy in either house, I think. I'd been looking forward to the 'project' but after all this I'm starting to think a ready to move in would be nice.

Thank you again.

Cakeguts

I wouldn't buy the first one. Simply because there is no right of access over the unadopted road and only along the back to the parking so where are you going to get the new kitchen delivered to? I can see a whole heap of hassle with that unadopted road.