Newbuild - more than 6 months between exchange and completion, how does the mortgage work?

kingstreet

If you want someone on here to represent you, you need to send them a private message. They CAN'T contact you first!

htb24

kingstreet said:

If you don't complete before the product's "drawdown deadline" you have to pick a new product from the current range. That's what's meant by a product expiry date.

So does a 12-month offer validity help in any way then if the product expiry date is after 5 months? I guess I just struggle to see the difference.

htb24

kingstreet said:

If you want someone on here to represent you, you need to send them a private message. They CAN'T contact you first!

Sorry, I didn't realise you're a mortgage broker too. I'll drop you a private message.

K_S

htb24 said:

I've just called another mortgage broker and they were quite surprised anyone would offer 12 months

@htb24 Off of the top of my head, with Halifax this is how it works for new build offers -
- The offer is valid until expiry of the product (eg: 31.12.2022)
- If, come December, you haven't completed on the mortgage, you can request an extension but will need to select a new product available at that point in time. The validity of the refreshed offer will again be linked to product expiry.

Hopefully I'm not mixing my lenders! 

kingstreet

K_S said:

htb24 said:

I've just called another mortgage broker and they were quite surprised anyone would offer 12 months

@htb24 Off of the top of my head, with Halifax this is how it works for new build offers -
- The offer is valid until expiry of the product (eg: 31.12.2022)
- If, come December, you haven't completed on the mortgage, you can request an extension but will need to select a new product available at that point in time. The validity of the refreshed offer will again be linked to product expiry.

Hopefully I'm not mixing my lenders! 

No. You're right. Valuation is refreshed free of charge after six months as well.

htb24

K_S said:

htb24 said:

I've just called another mortgage broker and they were quite surprised anyone would offer 12 months

@htb24 Off of the top of my head, with Halifax this is how it works for new build offers -
- The offer is valid until expiry of the product (eg: 31.12.2022)
- If, come December, you haven't completed on the mortgage, you can request an extension but will need to select a new product available at that point in time. The validity of the refreshed offer will again be linked to product expiry.

Hopefully I'm not mixing my lenders! 

That's helpful, thank you! 

For the Barclays 1.33% deal it seems to be different yet again. They give an expiry of February 2027 and an offer validity of 6 months - apparently they're open to extensions at the same rates, but the five years seem to start ticking down from application!

So I suppose 52 months of 1.33% plus 8 months of 4+X% are going to be roughly the same as 60 months of 1.61%.

K_S

htb24 said:

K_S said:

htb24 said:

I've just called another mortgage broker and they were quite surprised anyone would offer 12 months

@htb24 Off of the top of my head, with Halifax this is how it works for new build offers -
- The offer is valid until expiry of the product (eg: 31.12.2022)
- If, come December, you haven't completed on the mortgage, you can request an extension but will need to select a new product available at that point in time. The validity of the refreshed offer will again be linked to product expiry.

Hopefully I'm not mixing my lenders! 

That's helpful, thank you! 

For the Barclays 1.33% deal it seems to be different yet again. They give an expiry of February 2027 and an offer validity of 6 months - apparently they're open to extensions at the same rates, but the five years seem to start ticking down from application!

So I suppose 52 months of 1.33% plus 8 months of 4+X% are going to be roughly the same as 60 months of 1.61%.

@htb24 That's right. With Barclays, the initial new-build offer is for 6 months. At the end of 6 months you can request a further 6 month extension. The extension form will ask whether you want to keep the same product (if rates have gone up) or choose a new product (if rates have gone down).

htb24

K_S said:

@htb24 That's right. With Barclays, the initial new-build offer is for 6 months. At the end of 6 months you can request a further 6 month extension. The extension form will ask whether you want to keep the same product (if rates have gone up) or choose a new product (if rates have gone down).

That's promising! Is this (almost) guaranteed then? I don't feel completely happy accepting an offer where I 100% know in advance that I'm going to need an extension... I guess there will always be a bit of anxiety/uncertainty!

Would I be able to ask for that extension straightaway?

K_S

htb24 said:

K_S said:

@htb24 That's right. With Barclays, the initial new-build offer is for 6 months. At the end of 6 months you can request a further 6 month extension. The extension form will ask whether you want to keep the same product (if rates have gone up) or choose a new product (if rates have gone down).

That's promising! Is this (almost) guaranteed then? I don't feel completely happy accepting an offer where I 100% know in advance that I'm going to need an extension... I guess there will always be a bit of anxiety/uncertainty!

Would I be able to ask for that extension straightaway?

@htb24 Personally, I would never ever tell a client that an extension is guaranteed. If you look at the extension declaration forms below, you'll understand why.

https://intermediaries.uk.barclays/content/dam/intermediaries-uk-barclays/pdf/useful-documents/residential/BAR-9916234-Hi-Crop.PDF

https://www.leedsbuildingsociety.co.uk/_resources/pdfs/intermediaries-pdfs/intermediaries-forms-pdfs/hub/mortgage-hub-forms/lbs_offer_extension_declaration_form_0220.pdf

htb24

K_S said:

@htb24 Personally, I would never ever tell a client that an extension is guaranteed. If you look at the extension declaration forms below, you'll understand why.

Thanks! Well, I meant "guaranteed" in terms of guaranteed from their side, given my conditions haven't changed.

The "additional 6 months from the date the new application is submitted" on that form answers my other question anyway!