First time buyers Mortgage woes

FiddySmith

Hi all,

My girlfriend and I would highly appreciate some advice on our very stressful predicament re. our mortgage. 

We have exchanged contracts on our first house (with no agreed completion date, this is what we were advised to do by our solicitor, whether this is correct or not I am very much unsure), this is because the onward chain of the sellers are buying a new build which is under construction.
We were supposed to move into our house months ago but still the seller's new build is not completed. The completion date has been moved and moved and now is in December, therefore the real concern is that our current Mortgage Offer is due to expire also in December (2.79% Interest Rate), if we were forced to extend or renew our Mortgage offer, I have no idea if we would pass the new mortgage deals affordability checks. It will equate to £10,000s more for us over a 5-year fixed term.

Essentially, we just want to move into the house before our current mortgage offer expires!

We are trying to ask for current sellers to move into other accommodation whether or not their new build is built or not. The sellers have shown some interest in doing this as they seem to appreciate the difficult situation that we find ourselves in.

There are two main questions:
1. Are there any recommendations on how to navigate the sellers moving into some other stopgap accommodation so that if their new build wasn't completed, we could still move in prior to our current mortgage offer expiring? And should this be written into some contract?
2. If the absolute worst came to worst, and we were forced into a new mortgage deal and it turned out we could not afford it... Would we lose our deposit? This seems unbelievably unfair if so

I highly appreciate any useful responses, thanks!

Kind regards,
Fiddy

housebuyer143

Is there a long stop date in the contract? So if you get to a certain date and the property isn't ready you can pull out penalty free?

If not, then there is no incentive for the seller to move into rented and you can't drop out without losing your deposit and opening yourself up to legal proceedings.

Neilos9

Your solicitor advised you to exchange with no completion date?
Sounds like your Solicitor is acting for the Buyer of the new house, not for you....

GAMBITv5

We are currently on the opposite side of your example. We’re purchasing a new build which won’t be finished until several weeks after our buyers mortgage offer expired. 

We agreed to break the chain and move into temporary accommodation. Because it was at the buyers request we asked that they pay for our acres removal costs and storage which they agreed to.

the main reason for us to agree was that we would not command as high a sale price in 1/3/6 months time if the chain collapsed. A smart seller should realise that if they dont budge and risk the chain collapsing then it will probably lose them money in the long run.

perhaps they can move in with parent for a few weeks or months…

london21

Hopefully you can complete in time or get extension because new rates now 5.5%+

FiddySmith

housebuyer143 said:

Is there a long stop date in the contract? So if you get to a certain date and the property isn't ready you can pull out penalty free?

If not, then there is no incentive for the seller to move into rented and you can't drop out without losing your deposit and opening yourself up to legal proceedings.

Hey, yes there is a long-stop date. I think like Gambit said in the thread, the only incentive for the seller is that the chain doesn't fall down and they try to sell their house in a few months time for much less.

Cheers

FiddySmith

GAMBITv5 said:

We are currently on the opposite side of your example. We’re purchasing a new build which won’t be finished until several weeks after our buyers mortgage offer expired. 

We agreed to break the chain and move into temporary accommodation. Because it was at the buyers request we asked that they pay for our acres removal costs and storage which they agreed to.

the main reason for us to agree was that we would not command as high a sale price in 1/3/6 months time if the chain collapsed. A smart seller should realise that if they dont budge and risk the chain collapsing then it will probably lose them money in the long run.

perhaps they can move in with parent for a few weeks or months…

It's good to hear someone on the flipside of the coin. I believe what you mention is the only thing going in our favour at the moment, as you say... if it broke down, they would likely lose money in the long run as the house presumably wouldn't sell for as much.

Trying to stay positive right now...

Thanks for your comment  

penners324

Again, you exchanged without a completion date?

PK_London

I appreciate you are first time buyers - we all were at one point but exchanging contracts without a firm completion date is insanity. You need to have strong words with your solicitor for allowing you to exchange like this and push them to get the sellers to agree to a completion date. I'm sorry to say you should have been more aware of the process before you agreed to exchange and have the most to lose out of all parties unless things fall into place in your favour.

Sg28

PK_London said:

I appreciate you are first time buyers - we all were at one point but exchanging contracts without a firm completion date is insanity. You need to have strong words with your solicitor for allowing you to exchange like this and push them to get the sellers to agree to a completion date. I'm sorry to say you should have been more aware of the process before you agreed to exchange and have the most to lose out of all parties unless things fall into place in your favour.

I totally disagree with the this. The whole point of paying a solicitor is precisely because 99% of people do not know what they are doing, first time buyer or not. The solicitor should have specifically advised against exchanging without a completion date and explained all the pitfulls of doing such.

@FiddySmith I would speak to your solicitor and ask why they allowed this to happen especially as now you are in a position of potentially losing your deposit due to them. I would also put in a formal complaint.

kingstreet

PK_London said:

I appreciate you are first time buyers - we all were at one point but exchanging contracts without a firm completion date is insanity. You need to have strong words with your solicitor for allowing you to exchange like this and push them to get the sellers to agree to a completion date. I'm sorry to say you should have been more aware of the process before you agreed to exchange and have the most to lose out of all parties unless things fall into place in your favour.

There's a newbuild in the chain. It's completely normal to complete on ten days notice.