Buying house now , not moving in till January

COYI123

Hi everyone , me and my partner are making an offer for a place we have viewed on Saturday , the seller can’t move out until January as they are waiting for their new build to be complete and we are fine with that as we really want that house , our question is , if they agreed our offer this week , when would you have to put the deposit down , now or just before we move in ?? 

AdrianC

When you exchange contracts, and are legally committed to the purchase.

When will that be?
Normally, very close or even on the day of completion.
With an off-plan new-build, though, your vendor will have to exchange months in advance, and they may ask you to do likewise.

Whether that's wise or something your lender will be happy with is another question.

COYI123

AdrianC said:

When you exchange contracts, and are legally committed to the purchase.

When will that be?
Normally, very close or even on the day of completion.
With an off-plan new-build, though, your vendor will have to exchange months in advance, and they may ask you to do likewise.

Whether that's wise or something your lender will be happy with is another question.

So let’s say I have to put the deposit down in august , then when will I start paying my mortgage , because it won’t make sense for me to be paying each month from august when I can’t even live in it yet ? 

RAS

You only start paying the mortgage once you complete. And you won't be allowed to complete unless you have vacant possession (the seller's moving into their new house).

When does your mortgage offer run out? That is the bigger issue.

grumiofoundation

You will start paying the mortgage when you complete (ie actually buy the house). 

Having offer accepted, agreeing to buy, mortgage offer etc are legally meaningless - anyone can pull out at any point pre-exchange. 

It is when you exchange that you are legally agreeing to buy the house - so if you pull out you are then liable for vendors losses. 

You normally pay 10% at exchange to your solicitor, with the remainder paid at completion. (As above you can exchange/complete on same day to remove risk you have to pull out between exchange and completion). 

 

When would you want to exchange? Are you happy to take the risk you aren’t able to complete for whatever reason? 

TBagpuss

S others have said, you pay the deposit on exchange, at which point you are committed to buy. You start paying your mortgage when you complete, a which point you own the house and can move in.

Having a long gap between exchange and completion is possible but risky, as even f your situation changed or your mortgage offer lapsed or was withdrawn, you would still be legally liable to complete, and would use your deposit, and be at risk of paying other expense, if for any event you did not complete. 

Mortgage offers are generally only valid for 6 months so if you get an offer now it will have expired by January, and if you get in in the next month or so it will be close to expiring come January. While it's often possible to extend an offer, it's not guaranteed and after so long a delay the lender would probably review your finances before agreeing an extension. 

Maybe suggest to the sellers that they look at moving into rented accommodation so you can go through with the purchase now.

london21

COYI123 said:

Hi everyone , me and my partner are making an offer for a place we have viewed on Saturday , the seller can’t move out until January as they are waiting for their new build to be complete and we are fine with that as we really want that house , our question is , if they agreed our offer this week , when would you have to put the deposit down , now or just before we move in ?? 

If residential mortgage you won't be able to get a mortgage completed if the proprty is not empty.

Waunakee

As others have rightly said your biggest issue surrounds your mortgage expiring before you are in a position to exchange and put down your deposit.

The vendor of the house you want to offer on has told you their new build will be ready in January.....take that with a very large pinch of salt.Delays are common my last new build purchase was delayed by 18 weeks for a variety of reasons.Fortunately we had broken the chain and stayed with family so whilst inconvenient wasn’t a massive issue.

Its all a bit academic anyway until your offer is actually accepted!

user1977

london21 said:

COYI123 said:

Hi everyone , me and my partner are making an offer for a place we have viewed on Saturday , the seller can’t move out until January as they are waiting for their new build to be complete and we are fine with that as we really want that house , our question is , if they agreed our offer this week , when would you have to put the deposit down , now or just before we move in ?? 

If residential mortgage you won't be able to get a mortgage completed if the proprty is not empty.

I think you've misread something - nobody has suggested they won't be getting vacant possession at completion.

london21

user1977 said:

london21 said:

COYI123 said:

Hi everyone , me and my partner are making an offer for a place we have viewed on Saturday , the seller can’t move out until January as they are waiting for their new build to be complete and we are fine with that as we really want that house , our question is , if they agreed our offer this week , when would you have to put the deposit down , now or just before we move in ?? 

If residential mortgage you won't be able to get a mortgage completed if the proprty is not empty.

I think you've misread something - nobody has suggested they won't be getting vacant possession at completion.

True but what I meant was depending on completion date and the vendor moving out date, mortgage is only valid for 6 months and the date vendor gave might be further delayed with new build etc.

lonibra

I'll add my voice to those who have suggested that you think about the implications of a new build in the chain.

Your vendor will likely require an early exchange at which point you are locked in to this purchase.

The January timeline might just be aspirational. It's not unusual for those to slip by many months.

You will almost certainly have to reapply for your mortgage due to the timelines involved.

As an FTB think hard about what the above means to you.