Am I worried for nothing? Exchanging 3 months prior to completion.Stressing out

cramsteems

As title suggests, we are about to send deposit over to buy a house, the sellers of which are buying a new build property which is why the exchange is being forced so early despite the house not being ready.

We have a completion date (we had to fight for this, they just wanted it to be on notice but our mortgage offer would likely expire and there is no guarantee we would have gotten another one).

I am worried that the mortgage offer could theoretically be retracted in between exchange and completion, and if we could not source another mortgage in time would lose our life savings (we are first time buyers and saved every penny ourselves).

Am I worrying for nothing? We have already managed to buy some time as they wanted to exchange 2 months ago. But if we don’t exchange next week the house will go back on the market.

Owleyes00

The main concerning thing in your post is where you say there is no guarantee you would get another mortgage. While you are correct there is no guarantee, unless something material has changed in your circumstances that you haven’t mentioned the chances of you not getting a mortgage again are quite slim I should think…unless you are massively over stretching yourself and won’t be able to accommodate a different mortgage at a potentially higher rate?

Continental

I wouldn’t exchange with a such a long time to completion.

You do realise that you would have to purchase buildings insurance at exchange? Anything major going wrong with the house would then be *your* responsibility.

The sellers should go into rented/AirBnB or stay with relatives if they are so desperate to exchange with a long lead time......with a shortage of building materials who is to say it the vendors new build will even be ready? It might not be ready until after Easter or early Summer!

I doubt they will put it (the house you are trying to buy) back on the market as there is no way they will be able to exchange quickly. 

There will be other mortgages available.....I wouldn’t let them bully you into exchanging right now. Indeed there will be plenty of other properties available in the New Year. 

SpiderLegs

I don’t see the problem. 

Given it seems to be the thing you are worried about, when you agreed to exchange with a three month lead time, you specified that if your mortgage offer was pulled you could walk away with no penalty.

You did specify that didn’t you? 

RedFraggle

Exchanging contracts does not make you liable for repairs.

sheffield_soldier

I would be seeing if you could do a deal to get them out of the house early. I too am buying a house in this situation (through part ex) and you know you will have got a good price. Maybe even a contribution to their rent for a couple of months to entice them to accepting?

cramsteems

Owleyes00 said:

The main concerning thing in your post is where you say there is no guarantee you would get another mortgage. While you are correct there is no guarantee, unless something material has changed in your circumstances that you haven’t mentioned the chances of you not getting a mortgage again are quite slim I should think…unless you are massively over stretching yourself and won’t be able to accommodate a different mortgage at a potentially higher rate?

Thought someone might ask. Not overstretched, since the initial application we have had pay rises and have more savings than before. Have not taken anything out on credit or taken out any new bank or credit accounts and have no plans to. There really should be no reason.

cramsteems

SpiderLegs said:

I don’t see the problem. 

Given it seems to be the thing you are worried about, when you agreed to exchange with a three month lead time, you specified that if your mortgage offer was pulled you could walk away with no penalty.

You did specify that didn’t you? 

We asked our solicitor to add that, however we have been told it is unlikely to be agreed as the seller would then likely want the same clause from the seller of the new home and that will not happen. The new home provider, don't give a crap, they want an exchange asap so they have a guaranteed buyer otherwise they will happily take the sellers deposit and then the seller will take ours. 

pinkteapot

We once exchanged with 2.5 months from exchange to completion - and that didn't involve a new-build. It was a long chain and between exchange and completion there was Xmas/New Year, and various parties had holidays and surgeries (!). I didn't give it much thought to be honest!

Your mortgage will only be pulled with no chance of getting another one if you have a significant change to your circumstances - main one being job loss. How secure are your job(s)? 

You will overpay a bit for buildings insurance. Most insurers are "computer says no" to a period that long between exchange and completion. They're set up for four weeks max of you being responsible for the house but not yet living in it. We had to get insurance from Hiscox who are more expensive but more flexible. 

cramsteems

pinkteapot said:

We once exchanged with 2.5 months from exchange to completion - and that didn't involve a new-build. It was a long chain and between exchange and completion there was Xmas/New Year, and various parties had holidays and surgeries (!). I didn't give it much thought to be honest!

Your mortgage will only be pulled with no chance of getting another one if you have a significant change to your circumstances - main one being job loss. How secure are your job(s)? 

You will overpay a bit for buildings insurance. Most insurers are "computer says no" to a period that long between exchange and completion. They're set up for four weeks max of you being responsible for the house but not yet living in it. We had to get insurance from Hiscox who are more expensive but more flexible. 

Jobs very secure, there won't be any change to our finances. We already got home & building insurance from Aviva, hopefully its okay? We put the address as the house we are buying.

Marvel1

I would want advice from my solicitor what would happen if they fail to complete on the date provided.