Advice needed! Mortgage Offer Expiry and Poor Communication from Developer

charlylizz

Some advice needed on a new build purchase.

We exchanged in February 2022 with a Halifax mortgage offer that expired on 31st December 2022. The initial completion for the house was Oct / November - a little tight but this was before the wild interest rate rises and we really wanted that specific plot.

At the beginning of April 2022 we were told the house completion was now September 2022, great news, gave us lots of wiggle room and meant we didn't see the need extend or get a new mortgage offer at all. I had to ask for this date update however, it didn't come from the developer even though we'd been in to see the sales manager.

In June I requested an update from the Developer on completion date / progress, to be told it was now November - I don't believe we would ever have been told this if I hadn't asked, this then slipped to December at the beginning of July. We are obviously now concerned about the mortgage offer expiring (especially as the expiry date is in the Christmas break).

My husband went in to discuss this in person (I have COVID so didn't go) and we were told that a new site manager had come on board and expected labour and supply issues were now built into the schedule. They couldn't guarantee anything obviously, but they mentioned that they have December quotas and our house was one of the top ones to be completed in December. My husband was then told that all of the bricks that had been put up on the house were now being removed and replaced with a different type because of a supply issue - he was only told this after a passing remark about "not being able to go round to see the progress because of the bricks being taken off" which he had to probe the sales team further about. Another occasion something like this happened was for purchasing extras - we were called and told the prices were going up in 10 days and we needed to come in and pick our choices very quickly - it seemed very much like an after thought that we'd been contacted at all.

So I have two questions:
1. What would you do about the mortgage offer, it's with Halifax and obviously had a long expiry term anyway so doubt an extension is on the cards. We could lock something in now for ~£200-250pm higher to stave off the risk of interest rates going up even more. We went with the developer recommended mortgage broker for ease (RSC New Homes - they were free / paid for by the developer I assume) who seem fine but very much don't seem to want to go the extra mile re. asking for extensions etc. They've said that any extension would be at a higher rate. I'd ring Halifax myself and ask the question, unsure of if I can circumvent the broker to do this though?

2. Lack of communication / poor communication from the sales team. We would have started considering new mortgage offers much earlier if we had been informed of the date change earlier (than when I happened to ask...) and the fact that half our house is being rebuilt / prices were going up on options didn't seem to be important for them to tell us in advance. We know we're not owed any actual legal compensation and haven't lost any money currently, but do you think it's worth putting in an official complaint? The houses aren't selling as quickly as they once were on site, so I'd presume they want to keep us happy...

I should add, I'm not concerned about them being "cowboys" no matter my moaning above, they are a reputable builder in the area, and I work in construction myself so understand the current issues, it's just the poor and non-transparent communication which is the issue...

K_S

@charlylizz

1. They are right, an 'extension' (essentially a revised offer with a new product complete-by date) with Halifax would be on a rate available when the broker changes the product. The broker doesn't have to wait for December, they should be able to do it at any point. You can definitely ask Halifax but I don't expect that you will be able to make any changes or requests yourself.

As you mentioned "they were free / paid for by the developer I assume" I just want to point out that for almost ALL brokers, irrespective of whether they charge a fee or not, their main income is from the 'procuration fee' that the lender pays them upon completion. The amount will be mentioned clearly in the KFI/Illustration that your broker sent you when making the recommendation. In fact, the broker will usually pay the developer a fee (either fixed or more likely a percentage of the proc-fee) for referring clients to them. I hope that makes sense. 

charlylizz

Thanks for your reply, much as expected I think. Yes I was aware of the fee the lender gives them, it was outlined in the mortgage offer, do you think this affects their advice at all? I presume it shouldn't but I am cynical! Starting to think we'll just have to wait and see what happens with the build and make a decision in the Autumn...

K_S

charlylizz said:

Thanks for your reply, much as expected I think. Yes I was aware of the fee the lender gives them, it was outlined in the mortgage offer, do you think this affects their advice at all? I presume it shouldn't but I am cynical! Starting to think we'll just have to wait and see what happens with the build and make a decision in the Autumn...

@charlylizz Generally speaking, the proc-fee with mainstream lenders is a narrow range either side of 0.33-0.35% of the loan size. In such a heavily regulated industry such as residential mortgage broking, brokers are very very unlikely to risk their livelihood for the sake of a tiny difference in proc-fee between two lenders.

kingstreet

Check the builder's year-end. If it's 31 December I would put my mortgage on you completing before then to ensure your sale being included in bonus "season."

K_S is right. You don't extend a Halifax mortgage offer. You choose a new product with a new drawdown deadline and a new offer is issued. The valuation is refreshed automatically after six months, free of charge.