New build, Help to Buy - deadline stress!

barnstormer365

Thrugelmir said:

Don't buy a new build if it's too stressful. The process is perfectly normal. To commit time and resources the developer wants to sell the plots first as far as possible. House building is subject to any number of variables. 

I guess the issue is that I'm priced out of non-new build. Help to Buy is the only way I'm buying a house at all. Fully aware of variables but surely the idea that you put a five figure sum up and lose it through the fault of the builder is a bit mad, no?

barnstormer365

Thanks everyone - I'm going to demand a long-stop date, see how long any mortgage offer may last, and not rely on extensions - I can imagine that while the lenders have been giving extensions out up to now, if my offer lasts 6 months, then the economy looks like it's going to change in those 6 months. If the long-stop is longer than the length of my offer then I'm out, rather no house and my money in the bank than a chance of no house and savings sat in a giant housebuilding company's pocket through no fault of my own.

K_S

@barnstormer365 Limited solely to the mortgage related aspect of buying a new-build - you could reduce the mortgage related risk by going with a lender that offers a longer validity on the mortgage offer.

As an example, if you were to apply for a Halifax H2B mortgage now, the 'complete by' date on the offer would be 31/03/2023. They are updating the complete by dates next week so if you were to apply then, the offer would have a 'complete by' date of 30/06/2023.

Slithery

connors07 said:

My mum is currently in the process of purchasing a new build and applied for a mortgage that has no chance of lasting until the house is built but has been assured it 'just gets extended'. To those have had to do this process did you have to supply all the information again? Like IDs, Bank Statements, is it all from scratch again or do they just extend it as a formality? Rates could massively change between now and then in a negative way.

It all depends on the lender. Which one is she using?

kingstreet

Check with the HTB Agent, but IIRC if you are no longer able to get a mortgage or the HTB scheme ends, your contract becomes void and your deposit refunded. The developer has to sign-up to this to take part in the HTB scheme.

K_S

connors07 said:

My mum is currently in the process of purchasing a new build and applied for a mortgage that has no chance of lasting until the house is built but has been assured it 'just gets extended'. To those have had to do this process did you have to supply all the information again? Like IDs, Bank Statements, is it all from scratch again or do they just extend it as a formality? Rates could massively change between now and then in a negative way.

@connors07 Generally speaking, it does not simply get extended though normally you will not have to start from scratch. The process and length of any extension offered will vary across lenders.

At the very least it will require the broker to submit a form confirming that the applicant's circumstances haven't materially changed following which the lender will re-issue the extended offer. At the other end, the lender will require the latest payslip/s + bank statement and a fresh credit check before extending the offer.

With a new-build mortgage, it's always important to factor in the offer validity/extension policies at the outset, rather than simply focusing on the 'best rate'. For example you have mainstream lenders who will only give 6 months + 1 month extension, others with 6 months + 45 days, 6 + 3 months, 6 + 6 months, some with 9-12m+ validity. So your choice of lender could well vary depending on how long you expect the build to take.

connors07

@K_S @Slithery Apologies to hijack the thread just seemed linked. Halifax.

Thank you for the replies; I didn't even know they had extendable options. She did selected the longest duration as the build isn't even set for completion until early 2023 which I assume will be mid 2023 at best.

kingstreet

connors07 said:

@K_S @Slithery Apologies to hijack the thread just seemed linked. Halifax.

Thank you for the replies; I didn't even know they had extendable options. She did selected the longest duration as the build isn't even set for completion until early 2023 which I assume will be mid 2023 at best.

Halifax has specific newbuild products. As K_S says, the current drawdown deadline is 31/03/2023; whereas the current standard products are available only until 30/09/2022.

As you approach a drawdown deadline, a new product can be chosen but it will be from the range current at that time and not from when the application was submitted.

K_S

connors07 said:

@K_S @Slithery Apologies to hijack the thread just seemed linked. Halifax.

Thank you for the replies; I didn't even know they had extendable options. She did selected the longest duration as the build isn't even set for completion until early 2023 which I assume will be mid 2023 at best.

@connors07 With Halifax new-build offers, the initial offer itself is valid for much longer than most other lenders (for example 31.03.2023 if you applied for a Halifax new-build product today, or 30.06.2023 from next week) but it can't be extended any further.