Need some Professional Advice

skyjumper

hi everyone,

new to this site. one of my friends who is a regular recommended this site. i never knew about this site until recently, doh

I have a question, i hope as a newbie someone will shed some light into it.

i put deposit on a flat from it's off plan, last September, due for completion Sept 2008. i'm a First Time Buyer and this is going to be my residential Property where i will be living for the next 4-5 years. I have been living around this region for the last 2 years and did my research about the area and its potential.

now my question is

1. i had taken out a mortgage offer which will expire soon and since the flat is not completed i may have to take another mortgage - do i have to pay arrangement fee, survey fee and any other fees when i take out this?

2. will i have to pay an exit fee or early repayment fee if i dont stick with the same mortgage company which had offered me the Mortgage last september?

3. i had taken out a mortgage for £124,500, but now is in a position to pay a bit more from my saving towards the date of completion( Sept '08). can i reduce the amount on my mortgage offer to around £115000 without incuring a charge from my current provider (A & L )

i hope my question is clear as i tried to ask the same questions to my Mortgage Advicer ,but the answers made me more confused.

the only thing i know is that my current mortgage is due to expire soon and need some advice desperatley,
hope some of you could help me here

thanks in advance

homer_j_3

You would just need to ask for an extension of the mortgage offer. If this is refused then you may need to reapply.

Trying_to_be_good

From what I understand, it's not your current mortgage that's about to expire, but your mortgage offer - is that right?

Can I ask why you had a mortgage offer that was going to expire if you knoe the flat wasn't going to be ready (i.e. you wouldn't be able to complete the purchase) until September 08? Did your adviser know this?

Assuming you haven't already been advanced the mortgage funds, I don't see how there can be an earlt repayment charge - at worst you'll forfeit any arrangement fee you've already paid (though why your adviser would've recommended you pay this if you couldn't complete in time I don't know).

If you're now wanting a different mortgage (or you're out of time on the original offer), you'll probably need to pay whatever fees are necessary (some might be included in the deal).

Terminology is important - taken out a mortgage means you've received the money from the lender. Offered a mortgage means they are preapred to lend to you.

Hope this helps

skyjumper

thanks homer_j and trying to be good for ur suggestions

i had informed my IMA, at the time of application, that the property will be finishing only in 12 months. i was adviced that the mortgage offer will expire at the end of 6 months and i will have to re-apply at the end of 6 months.
i have been offered a mortgage for £124500 and the bank took £599 as arranement fee. they sent me an offer letter which my solicitors used for exchanging the contract last Sept.
what i need to know is that - do i have to pay another arrangement fee AGAIN for getting an offer which will run for another 6 more months when the property and contract will actually be ready for completion.
hope my enquiry is more clear this time
thanks

skyjumper

just thought i would add some more details regarding my query

price of the property £152500
incentives and FTB discount £ 12200
booking fee £250
Survey fee £360
Solicitors fee £2600 (including 1% stampduty fee)
arragement fee £599(already paid to the bank at the time of mortgage offer)
Deposit paid at the time of
exchange of contract £10000
mortgage offer for £124500

one of initial query was that - the bank has offered this mortgage offer - if i need only 115000 instead of the 124500 which they had offered me, can i do it when i'm requesting for an exteension of my current mortgage offer

u may find me asking very silly questions, but as u can see i have only found out about this site today- so please don't be hard on me

thanks

skyjumper

i will be grateful if anyone here could have a look at the figures aboove and tell me if i have gone wrong somewhere in my calculations in buying my first property.

thanks

UK007BullDog

If your adviser knew that the property would not be finished 12 months later and took the money off you knowing they only offer for 6 months I would ask for my money back or ask them to lengthen the offer for another 6 months. Missold comes to mind here and incompetent adviser. All you needed was an AIP not a full offer.

*Shakes Head*

skyjumper

thanks bulldog

if the Bank were to offer the AIP - would they charge me the arrangement fee ? everyone involved were aware that the property will only be ready in 12 months time.

i feel like i have been taken for a ride
wish i knew about this site earlier

UK007BullDog

no, an aip means that the adviser will give you a letter stating they will lend you the money. no need to pay any fees.

the adviser took you through a full application. I would insist on fees refund or a 6 months extention of the deal, preferably at that rate if possible as rates have gone up.

jill2002

If your adviser knew that the property would not be finished 12 months later and took the money off you knowing they only offer for 6 months I would ask for my money back or ask them to lengthen the offer for another 6 months. Missold comes to mind here and incompetent adviser.

I would definately agree. However, you would need more than an AIP as you needed to exchange contracts - so a full mortgage application and offer was required - this is correct. But you should have been sold a deal that had an extended or open completion date. It is highly unlikely that the lender will extend the deal for that length of time. Yes, you will now be required to pay a fee again for a new deal, you may have to pay another valuation fee or maybe just a re-inspection fee (normally alot less) if you decide to stay with the same lender. The original valuation would 'run out' after about 6 months.

To ensure this doesn't happen again, check the completion end date and even add the fee on to the loan until completion - most mortgages allow you to repay up to 10% each year - so if you then paid the amount of the fee, you wouldn't pay interest on it.:T

skyjumper

Thanks Jill and Bulldog

i wish there were more people like you in the open market who would tell us honest answers than beat around the bush esp, when it comes to parting our hard earned money.

Is there anyway i could negotiate with the lender (A & L), now that I have paid the Arrangement fee and survey fee for a property which never existed at the time of the mortgage offer. Do u think they r going to squeeze more money out for doing a proper survey now that the building is in place.
any more advice will be appreciated