Mortgage Offer Extension after exchange

NannyPlum89

Hey guys,
This is probably a really stupid question, but as first time buyers we are pretty clueless.
We've exchanged contracts on our new build home, but unfortunately we will be applying for a mortgage offer extension soon, as the build has been massively delayed.  We have already exchanged contracts. 

Will we have to exchange contracts again once we get the offer extension, or will we still be bound by the initial contracts we already exchanged with? 

Thanks 

Slithery

You are still bound to the initial exchange, no matter whether or not you are granted an extension.
What do you plan to do if you can't get an extension?

eddddy

If you have exchanged contracts with the developer, both you and the developer are bound by that contract. (Your mortgage offer expiring and/or your mortgage offer being extended won't change anything.)  So you don't need to exchange contracts again.

In fact, the big risk is that your mortgage lender will refuse to extend your mortgage offer - so you will be legally bound to buy the property, but you won't have a mortgage to pay for it. (So you'd need to try to find another mortgage lender.)

But maybe you have a 'longstop date' in your purchase contract, which would allow you to walk away if the build is delayed and your mortgage offer expires.

NannyPlum89

Thanks for your replies. Broker is confident that an extension will be fairly straightforward, apparently the lender would just want to see updated payslips. If a problem does arise, we should have other lenders available to us. 

hazyjo

What if one of you loses your job? As above, I hope there's a longstop date.