New house delayed. Mortgage offer nearly expired

Pinkpyjama

Hi, we exchanged on a plot in February with a proposed completion date of around late May. Brexit, material and labour shortage has resulted in the house still not ready and with a loose target date of end Oct. Current mortgage offer expires early Nov. Building society willing to extend for only another 10 days after (They have extended once already) . I get that we might have to reapply but has anyone known of a similar issue (I gather this is not an isolated case this year) where they have successfully got the builder to foot the cost of a new application?
I am aware that I don’t have much clout bargaining wise as have exchanged contracts but wanted to see if any have been successful. After all, it is hardly my fault that the builder has failed to finish the build on time, however the circumstances this year have been rather unprecedented.
Is it a case of ‘tough and suck it up sir - that’s the risk you take exchanging early’

user1977

Pinkpyjama said:

I am aware that I don’t have much clout bargaining wise as have exchanged contracts 

But do you have a longstop date in the contract i.e. are you entitled to pull out before your morgage offer expires? Hopefully yes, in which case you do have a bit of negotiation power. Unless of course prices have risen and the builder thinks they now might be able to sell for more...

saajan_12

Pinkpyjama said:

Hi, we exchanged on a plot in February with a proposed completion date of around late May. Brexit, material and labour shortage has resulted in the house still not ready and with a loose target date of end Oct. - okay, these are targets / expected dates, which are pretty meaningless. What was your long stop date? 
Current mortgage offer expires early Nov. Building society willing to extend for only another 10 days after (They have extended once already) . I get that we might have to reapply but has anyone known of a similar issue (I gather this is not an isolated case this year) where they have successfully got the builder to foot the cost of a new application? - well the 10 days is really a buffer if there's a minor delay racing towards a certain date. You likely will need to reapply. 
I am aware that I don’t have much clout bargaining wise as have exchanged contracts but wanted to see if any have been successful. After all, it is hardly my fault that the builder has failed to finish the build on time, however the circumstances this year have been rather unprecedented. - well its not your fault, but you already agreed to be flexible with any completion date upto the long stop, when you had a mortgage with a certain expiry date. You can't now enforce a claim against the builder if they're just moving within the flexibility you agreed to. If however the completion goes beyond the long stop, then you absolutely can renegotiate as part of agreeing to extend. 
Is it a case of ‘tough and suck it up sir - that’s the risk you take exchanging early’

Key is whats your long stop date - if they're within that, then they can force you to complete upon serving notice to complete, so you better have your mortgage funds by then. You can't threaten to walk away etc, so you'd have to pay any reapplication costs. 

If they're going beyond the long stop, then you can threaten to walk away and negotiate the cost of reapplication. Your success might depend on how prices have changed since Feb, but they could weigh the small fee against having to restart the sales process. 

Pinkpyjama

Thank you for those thoughts. I must hang my head in shame and know nothing about any long stop date. I intend to find out tomorrow.
The price of the house agreed in late January is favourable compared with prices right now and we got stamp duty paid for so we really still want to move.
When I sit back and take stock, I’m realistic as to fund any new application, just would like a bit of reassurance and a more firm date to move in. If within the first week of November, all good otherwise……..

Pinkpyjama

I found out today the longstop date is 31st Dec.
Also that my lender will not extend the current 7th Nov deadline.
The house is planned for end Oct.
All rather tight so I'm starting to ask about reapplying but would feel much better if builder would allow for this. 
As I type we are awaiting their reply.

AFF8879

Aren’t long stop dates normally purposely set for before any mortgage offer expiry?

Pinkpyjama

I have no idea. Just was told for this case it was the original due date plus 6 months.
At the time of exchange in February I just didn’t see a delay this long. I’m coming to a view there’s a solution or two here, just don’t like Plan A too much with as yet a rough date in end of Oct and an expired mortgage offer only a week later.
Plan B is reapply soon, use the same lender and criteria with the hope it shouldn’t take any longer than 3 weeks. There is some added benefit in that with a new application (due to some inheritance due) there’s potential to not borrow as much with obvious reduction in monthly payments.
I could be in worse positions, of that I am most mindful. Just need to make sure I avoid getting into some nasty territory and if I don’t approach it soon enough, it all gets a little bit close for comfort.

katkatmachine

Omg!!! Almost the same timeline as ours when we completed last year! Our house was done end of October, we completed 20th November and our mortgage extension was only until 21 November! We were super stressed out because of it! We were on the phone with the developer and our solicitor almost everyday to remind them about our mortgage extension that we had to complete soon!

Anyway, I would prepare for your Plan B if I were in your position. Your timeline is a bit tight. Even if they finish the house end of October, there’s still the NHBC check. If everything goes well with the check and they serve the notice immediately, you can complete after two weeks. If not, like what happened to us, it passed the NHBC checks but they only served the notice a week after (we almost didn’t make it because of this). Also there’s still the (very small) possibility of not passing the checks and they still need to fix something so yeah i think it’s better to prepare for the new application. But I’m not sure if you can reapply immediately to your current lender. We were advised by our mortgage adviser before that we can’t reapply with the same lender until the first offer that we had expires, our lender is Halifax. 

All the best!