New build FTB

LucasH

Hi ,

We have received our DIP from Barclys and will be reserving a new build property next week, £500 non refundable - valid for 28 days.

Covering worst case scenario.
What happens if the full mortgage application is declined?

Has anyone else been in this situation?

Thanks

L

Tufa

Your solicitor and/or mortgage broker can apply for extension until you apply with another lender.

Mine was valid for 28 days however only exchanged like in 2.5 months.

sal_III

The 28 days is wishful thinking and they know it. In most cases the developer is happy to extend it, as long as there is progress on the case. In my case it took nearly 3 months from reservation to exchange.

Worst case scenario is you lose the £500, can't be helped, part of the agonising process of becoming a home owner.

LucasH

Hopefully it doesn't come to that but thank you for the helpful information.

Its a new build that wont be ready until May/June 2019 anyway so i'd imagine they would need an extension anyway since most mortgage offers are valid for 6 months.

LucasH

Tufa wrote: »

Your solicitor and/or mortgage broker can apply for extension until you apply with another lender.

Mine was valid for 28 days however only exchanged like in 2.5 months.

I take it this happens and sometimes the offer gets declined but people manage to get another lender without too much hassle?

LucasH

The builders have a £2000 fee, which comes off the deposit, but this is to be paid on completion of missives. I take it this wouldnt be paid until a mortgage has been accepted?

Sorry for the questions, but we are completely new to this.

Tufa

LucasH wrote: »

I take it this happens and sometimes the offer gets declined but people manage to get another lender without too much hassle?

Yes, it is quite normal. As long as they see that you have applied with another lender they are fine with it.
Again my example, had to apply 3 times (down-valued twice), but always applied on the same day of rejection so the developer was ok with it.
Make sure you mention to your broker that the estimated completion date is 9-10 months away so they will arrange the offer to be valid longer than 6 months.

LucasH

Yeah they are aware of that. My fear is that they dont offer a mortgage based on bank statements.