Exchange and completion 7 months gap

itani

Currently applying for a mortgage with Halifax for a Redrow new build. We got our HTB approval but there's something I'm worried about.

The new build price is £495,000 and doesn't complete till May and that's without delays if there will be any. So we will be required to put in £25,000 when exchange contracts which at the latest should be November if everything goes well with Halifax.

Now my main concern is how can I go about protecting my deposit and not being liable if our mortgage offer gets revoked for any reason between now and May because we will also need to reapply anyway as the completion date will be over 6 months.

We sent a long email explaining our reasoning to the solicitors as we don't know what will happen to bank mortgages after Brexit. How often to developers such as Redrow accept a clause like this in the contract?

Thrugelmir

When you exchange contracts you are obliged to complete the purchase. Not just the deposit which is at stake if you fail to do so. You will also be potentially liable for any loss incurred by the developer.

Why would your mortgage be revoked? Do you have concerns.

Mortgages will remain available after the 31st March next year. Brexit isn't going to change daily life.

itani

Thrugelmir wrote: »

When you exchange contracts you are obliged to complete the purchase. Not just the deposit which is at stake if you fail to do so. You will also be potentially liable for any loss incurred by the developer.

Why would your mortgage be revoked? Do you have concerns.

Mortgages will remain available after the 31st March next year. Brexit isn't going to change daily life.

No concerns right now but anything can happen between now and then. Also wouldn't Brexit make lending probably stricter? I know we are obliged to complete but I would like to be protected with not knowing what will happen after March.

getmore4less

Get an exit clause for not being able to secure lending in the contract alongside the long stop clauses(which should include delays and changes to specifications).

itani

getmore4less wrote: »

Get an exit clause for not being able to secure lending in the contract alongside the long stop clauses(which should include delays and changes to specifications).

How easy is it to do this? Would the developer be cooperating? Have Redrow done things like this before?

AnotherJoe

itani wrote: »

No concerns right now but anything can happen between now and then. Also wouldn't Brexit make lending probably stricter?

No. Why would you think that?

davidmcn

getmore4less wrote: »

Get an exit clause for not being able to secure lending in the contract alongside the long stop clauses(which should include delays and changes to specifications).

Unlikely you'll find a vendor willing to accept that (too vague and they've got no control over how hard you've tried to get a mortgage). A long stop linked to a specific expiry date for your mortgage offer would be more reasonable.

itani

davidmcn wrote: »

Unlikely you'll find a vendor willing to accept that (too vague and they've got no control over how hard you've tried to get a mortgage). A long stop linked to a specific expiry date for your mortgage offer would be more reasonable.

Whats that mean?

davidmcn

itani wrote: »

Whats that mean?

Not sure which bit you mean by "that".

Your mortgage offer will expire on a specific date. You could try putting in a provision in your purchase contract allowing you to walk away if completion doesn't happen by that date.

itani

davidmcn wrote: »

Not sure which bit you mean by "that".

Your mortgage offer will expire on a specific date. You could try putting in a provision in your purchase contract allowing you to walk away if completion doesn't happen by that date.

Sorry about that. I meant long stop date. Take for instance if our mortgage offer expires April and we put our long stop date April 1st. What would happen when that date arrives? Sorry I'm a first time buyer so just trying to make sure I'm protected in every way possible.

davidmcn

itani wrote: »

Sorry about that. I meant long stop date. Take for instance if our mortgage offer expires April and we put our long stop date April 1st. What would happen when that date arrives?

What would happen is that you'd have the right to pull out.