Breakup after exchange before completion new build

ljp1990

Hello

We have exchanged contracts on a £225k new-build house on a nil deposit, intending to put 5% down (which is sat ready in my LISA) and using the 20% equity scheme from the government. Completion is not until end of September at the earliest as this is when the house is expected to be built by.

As we have exchanged I know I am liable to complete - I would lose my £11k LISA and have to find another £10k if I wanted to back out (although, have people been able to get out sting free before?)

I am able to afford the house on my own payment wise - on my £50k salary I am hoping I can get the £168k mortgage in my sole name and still qualify for the £45k loan from the government alone (I *think* this is likely).

Has anyone had any experience in changing names on the legal documents and reapplying for the mortgage in their own name after exchange and before completion? I don't know if this is possible?

muhandis

Presumably, both of you are bound by the exchange of contracts so it's not just your problem.

Does you ex have any skin in the game financially and are they likely to co-operate on anything that needs doing?

gary83

ljp1990 wrote: »

Hello

We have exchanged contracts on a £225k new-build house on a nil deposit, intending to put 5% down (which is sat ready in my LISA) and using the 20% equity scheme from the government. Completion is not until end of September at the earliest as this is when the house is expected to be built by.

As we have exchanged I know I am liable to complete - I would lose my £11k LISA and have to find another £10k if I wanted to back out (although, have people been able to get out sting free before?)

I am able to afford the house on my own payment wise - on my £50k salary I am hoping I can get the £168k mortgage in my sole name and still qualify for the £45k loan from the government alone (I *think* this is likely).

Has anyone had any experience in changing names on the legal documents and reapplying for the mortgage in their own name after exchange and before completion? I don't know if this is possible?

You would not be able to get out string free, that's the whole point of exchanging contracts, you've agreed to buy that property at that price as well as your deposit potentially you could be on the hook for the company's losses, if they eventually sell at a lower price than you agreed to.

Whilst it's a crappy situation to be in, one silver lining is your not purchasing in a chain & your not accountable for the rest of a chains costs

ljp1990

Thank you for your reply I am intending to go at it alone with the property as I know the money I would lose, so it’s more a case of how easy is it to change mortgage and contract documents before completion.

MovingForwards

Did you do it through a broker or direct with the bank/BS?

If through a broker let them know what's happened and explain you want a mortgage just for yourself.

amnblog

These are questions you should be asking your Solicitor and your Broker/Lender