4 Months between Exchange and Completion - What should i do?

Rambosmum

n15h wrote: »

I spoke to my mortgage broker today who said that many lenders don't offer mortgage offers longer than 3 months, so I am quite limited at the moment. We will review the products again when I exchange in March to see if other mortgage lenders will be more willing to offer as the duration from offer to completion will be much shorter then!

I'm surprised they've said that. We have never had a mortgage offer less than 6 months. 3 months is average for a house purchase, so you'd often have lots of people having to reapply right at the end!

n15h

Rambosmum wrote: »

I'm surprised they've said that. We have never had a mortgage offer less than 6 months. 3 months is average for a house purchase, so you'd often have lots of people having to reapply right at the end!

I believe that's what going to happen in my case after the exchange takes place.


I'm using London & Country following the good reviews and recommendations from MSE. The broker said he will review rates once contracts are exchanged. If another better product is found, we will go with that. However that means I will have to pay for 2 valuations/surveys


Got my recommendation and illustration yesterday - Halifax 1.91% fixed for 2 years on £155K with no product fee = £486.


Broker also mentioned another product - Halifax 1.53% fixed for 2 years on 155K with £999 product fee = £465.


I'm inclined to go with the cheaper product and add the fee to the loan. Will speak with the broker this evening to confirm if I want to proceed with their recommendation.

Lokolo

Wait for other brokers on this site to confirm but but I am pretty confident that Halifax offers for 6 months.

Also it would be cheaper for you to take the product fee.

Over the 2 years the nil product fee will cost you £5,921 in interest.
The 2 years with product fee will cost you £4,743 in interest and £999 fee, totalling £5,742.

You would save £179 over the 2 years by taking out the product fee.

n15h

Lokolo wrote: »

Wait for other brokers on this site to confirm but but I am pretty confident that Halifax offers for 6 months.

Also it would be cheaper for you to take the product fee.

Over the 2 years the nil product fee will cost you £5,921 in interest.
The 2 years with product fee will cost you £4,743 in interest and £999 fee, totalling £5,742.

You would save £179 over the 2 years by taking out the product fee.

Yes, the L&C advisor said Halifax was offering for 6 months.


Thanks for your calculations. I'm unsure why the advisor recommended the higher product .


I hope you don't mind me asking, but where did you calculate those figures? I used an excel spreadsheet (found on another thread) and that calculates:


1.91% with no product fee = £11691 over 2 years
1.53% with £999 product fee added to loan = £11049 over 2 years


£642 cheaper over 2 years


If the £999 product fee is paid upfront, the spreadsheet calculates that after 2 years the total cost would be £11976 i.e. £285 more expensive

Lokolo

n15h wrote: »

yes, the l&c advisor said halifax was offering for 6 months.


Thanks for your calculations. I'm unsure why the advisor recommended the higher product .


I hope you don't mind me asking, but where did you calculate those figures? I used an excel spreadsheet (found on another thread) and that calculates:


1.91% with no product fee = £11691 over 2 years
1.53% with £999 product fee added to loan = £11049 over 2 years


£642 cheaper over 2 years


if the £999 product fee is paid upfront, the spreadsheet calculates that after 2 years the total cost would be £11976 i.e. £285 more expensive

£155,000 * 0.0191 * 2
£155,000 * 0.0153 * 2 + 999

Thrugelmir

n15h wrote: »

1.91% with no product fee = £11691 over 2 years
1.53% with £999 product fee added to loan = £11049 over 2 years


£642 cheaper over 2 years


If the £999 product fee is paid upfront, the spreadsheet calculates that after 2 years the total cost would be £11976 i.e. £285 more expensive

How much do you still owe at the end of the 2 year period?

nicmyles

I believe that's what going to happen in my case after the exchange takes place.

Don't get in a position where you have to reapply for a mortgage AFTER exchange. At that point, you are contractually bound to buy the property and therefore face a lot of problems if for whatever reason you cannot secure a mortgage (your circumstances change, the market changes altering your LTV, the valuation is unfavourable, etc.).

Make sure you have a valid mortgage at exchange that does not expire before the completion date.

n15h

Thrugelmir wrote: »

How much do you still owe at the end of the 2 year period?

Product 1 (1.91% with no fee)
Total Cost: £11691
Balance Remaining: £149123


Product 2 (1.53% with £999 fee added to loan)
Total Cost: £11049
Balance Remaining: £149607

n15h

nicmyles wrote: »

Don't get in a position where you have to reapply for a mortgage AFTER exchange. At that point, you are contractually bound to buy the property and therefore face a lot of problems if for whatever reason you cannot secure a mortgage (your circumstances change, the market changes altering your LTV, the valuation is unfavourable, etc.).

Make sure you have a valid mortgage at exchange that does not expire before the completion date.

Thank you - i'll certainly keep those points in mind.


I am looking to book the conveyancers this week and also get the survey done. Halifax are charging £200 for a basic valuation - Most likely i'll request to have a Building Survey and paying the extra, although I'll have to wait for the surveyor to contact me as per Halifax's website:


https://www.halifax.co.uk/mortgages/mortgage-information/valuation-schemes/

CommitedToChange

nicmyles wrote: »

Don't get in a position where you have to reapply for a mortgage AFTER exchange. At that point, you are contractually bound to buy the property and therefore face a lot of problems if for whatever reason you cannot secure a mortgage (your circumstances change, the market changes altering your LTV, the valuation is unfavourable, etc.).

Make sure you have a valid mortgage at exchange that does not expire before the completion date.

This is a very important point - don't end up in this situation :eek:

My mortgage was only for 3 months and they have only issued a 1 month extension :mad: