28 days to exchange on new build that isn’t even built yet

Morris29

Hi, after some advice please. We’ve seen a new build that we’re interested in under the HTB scheme. The sales team have advised the following and I’m not sure if it’s correct info:

We have to use their mortgage advisor

They can’t offer cash incentives on HTB

We have to put the deposit down then exchange within 28 days (on a house that’s not even had the foundations dug and won’t be ready until at least November)

If the part about 28 day’s exchange is correct does that mean we’d need our full deposit and stamp duty funds to be available within those 28 days?

Do mortgage offers tend to last that many months? We’ve got an agreement in principle that expires in two months

Many thanks

kingstreet

Morris29 wrote: »

Hi, after some advice please. We’ve seen a new build that we’re interested in under the HTB scheme. The sales team have advised the following and I’m not sure if it’s correct info:

We have to use their mortgage advisor

Not true.

They can’t offer cash incentives on HTB

Not true. There may be some restrictions, but some lenders accept builder cash incentives upto 5% of the purchase price. It depends on chosen lender.

We have to put the deposit down then exchange within 28 days (on a house that’s not even had the foundations dug and won’t be ready until at least November)

You will hand 5% deposit to your solicitor ahead of exchange of contracts and your target is 28 days from reservation

If the part about 28 day’s exchange is correct does that mean we’d need our full deposit and stamp duty funds to be available within those 28 days?

No. Just 5% deposit.

Do mortgage offers tend to last that many months? We’ve got an agreement in principle that expires in two months

No. Longest is currently end of September. It is unusual for a solicitor to permit exchange of contracts without a mortgage offer which will be valid for the estimated completion date.

The HTB Agent will also not issue an Authority To Proceed with an estimated completion date in November. The maximum is nine months from now, three months to exchange contracts then six months to complete.

The builder needs to wake up here. The realistic plan here is to reserve in March, exchange target in April and completion in November giving just about the right period for the mortgage offer and HTB.

p00hsticks

kingstreet wrote: »

Not true.
You will hand 5% deposit to your solicitor ahead of exchange of contracts and your target is 28 days from reservation

Why 5% ?

I thought the default deposit at exchange was 10% (although it can be varied with the agreement of both parties) ?

Is it different for new builds ?

robgoode

p00hsticks wrote: »

Why 5% ?

I thought the default deposit at exchange was 10% (although it can be varied with the agreement of both parties) ?

Is it different for new builds ?

I think the 5% deposit is because of the HTB scheme where that is all thats required

kingstreet

It's max 5% for HTB cases.

You can pay more, just it's at completion instead of exchange.

amnblog

Interesting thread with Kingstreet’s response.

An example of a developer/builder running roughshod over a purchaser to suit their own profit agenda off the back of tax payers money.

Name and shaming in order here. It stinks.

Morris29

Thanks for such quick replies. So would you recommend I go back to the builder and state the above ref mortgage offer validity and the authority to proceed?

csgohan4

Morris29 wrote: »

Thanks for such quick replies. So would you recommend I go back to the builder and state the above ref mortgage offer validity and the authority to proceed?

Who is the developer?