Mortgage offer to completion

David8614

Hi all,
Firstly apologies if this is something that gets asked regularly, but there are some things specific to my position I'd like some guidance on.

We are essentially first time buyers (currently renting) and we reserved a new build property on 6th June. We had our formal mortgage offer on Wednesday 1st July which we are just waiting to hit our solicitors in hard copy format. Searches were paid for on 19th June. The reservation form stated a proposed completion date of 20th July which is not going to happen however I have some questions....

Our rental month goes from the 8th - 8th plus we go on holiday on 7th August - is a completion date of 4-5th August realistic?
When do we inform our landlord of our intention to vacate the property? We need to give a months notice so ideally this coming week but is that too risky?
We are using the HTB deposit scheme, does this generally add any time to the process?

Thanks in advance.

BlueC

Nobody here can tell you what is realistic. Only your solicitor and the selling agent/vendor could give an idea of this.

In terms of your rental. Why not try for exchange 1 month (or several weeks) prior to completion, then you can give notice on your rental when you have exchanged and therefore minimise the overlap?

Also, I am not sure, but I don't think rentals can force you to only leave your contract on the monthly anniversary date of the tenancy so you should have more flexibility than only considering the 8th of the month. You should clarify this with your agent or landlord but also seek advice because I am not sure they can enforce this stipulation.

David8614

BlueC said:

Nobody here can tell you what is realistic. Only your solicitor and the selling agent/vendor could give an idea of this.

In terms of your rental. Why not try for exchange 1 month (or several weeks) prior to completion, then you can give notice on your rental when you have exchanged and therefore minimise the overlap?

Also, I am not sure, but I don't think rentals can force you to only leave your contract on the monthly anniversary date of the tenancy so you should have more flexibility than only considering the 8th of the month. You should clarify this with your agent or landlord but also seek advice because I am not sure they can enforce this stipulation.

You say that but when I told the solicitor that we had received our mortgage offer they quoted 10-12 weeks for completion which is just daft!

Is it generally a good idea to wait until exchange before giving notice on your rental agreement?

SMR710

No one really knows the answer to your question. Even if your property is ready, built and ready to complete on; the lender may have outstanding enquires on anything from the searches results to the content in the contract, the deeds etc. Just because there is a mortgage offer on the table now, there are still things to work through. 

julicorn

David8614 said:

Is it generally a good idea to wait until exchange before giving notice on your rental agreement?

Yes. Very much so. In fact, it's generally a huge gamble to not do that. 
Our completion only happened 3 months after the initial dates that were thrown around, and that is really not uncommon at all. Don't give notice until you've exchanged contracts that have a completion date in them. It might be that you have a bit of overlap between your rental and the house you're buying, but to be honest that just makes your life easier (and gives you more time to move). 

julicorn

Also, what is 'daft' about 10-12 weeks to completion? Our first purchase took 6 months, entirely chain free. Lots of stumbling blocks can show up during this process.

eddddy

David8614 said:

Is it generally a good idea to wait until exchange before giving notice on your rental agreement?

That's certainly the safest way of doing things.

There is no certainty about the date of completion until you've exchanged contracts (in theory, it's even possible that something could happen any time before exchange, and the whole deal is permanently cancelled).

In the past, with new builds, people often exchanged contracts with "completion on notice" - i.e after you exchanged, you still didn't have a firm completion date. But perhaps the COVID situation means that people won't do that any more.

David8614

Ok. I'm going to stand by statement of saying that 10-12 weeks from Mortgage Offer to Completion on a new build is daft. I forgot to mention that it's a show home too so the house itself is ready to go. Both my mortgage advisor and developer say 4-6 weeks is more realistic and acceptable. In my opinion an estimated 10-12 weeks means the solicitor isn't not doing their job as quick as what they're being paid to do.

hazyjo

Do remember to come back and let us know how long it took in the end, won't you

Always helpful for others.

bucksbloke

David8614 said:

Ok. I'm going to stand by statement of saying that 10-12 weeks from Mortgage Offer to Completion on a new build is daft. I forgot to mention that it's a show home too so the house itself is ready to go. Both my mortgage advisor and developer say 4-6 weeks is more realistic and acceptable. In my opinion an estimated 10-12 weeks means the solicitor isn't not doing their job as quick as what they're being paid to do.

It can really depend on how long it takes to get searches. Some councils can do it in hours. Where I live, it takes at least four weeks! 

bob_the_dinosaur

every chain is as individual as the people in it.
My advice would be to just deal with things as they happen, don't try and move and then go on holiday a day or two later (as much as you will need it)
Do what you can before your holiday, have that, come back and if there is still stuff to do then thats how it is, give your notice for a date that allows you time and breathing space