New Build - Reserving Mortgage How Long?

darkcloudi · 8 February 2018 at 9:46PM

I am planning on buying a new build but was wondering which mortgage providers are the best to go for. From what the agent told me the house is not completed till Aug / Sept, so applying for a mortgage now would mean it would expire by the time I got to exchange.

Would I be best to wait till April to apply for a mortgage?

I am in the process of putting 120,000 from sale of my current home, applying for Help to Buy to assist with the new purchase.

To note, my current mortgage is on a fixed rate with Nationwide currently on 3% penalty and will be 2% penalty from July. Was tempted to stay with Nationwide due to this as its portable else they will be a penalty. Current balance is £38,000

A broker I spoke to suggested to go for Satander as they are good and flexible to extend the date, I was planning to speak to Nationwide in the morning on how flexible they were on new builds just in case delays in the build. I want to go for either a 5 year fixed or 10 year fixed.

I bank with First Direct and seen the rates they offer are better.

Thanks for any responses

Thrugelmir · 8 February 2018 at 9:52PM

darkcloudi wrote: »

so applying for a mortgage now would mean it would expire by the time I got to exchange.

You mean completion. The developer will expect to to exchange contracts within a short period of time. Meaning that you are committed to the purchase. Potentially without having a mortgage in place.

There's no timetable to new housebuilding. The dates you've been provided with are just an estimation. Be prepared for them to slip.

darkcloudi · 8 February 2018 at 10:06PM

Thanks, yes I meant completion. I had feeling the date would slip as have heard from people it slipped by a month or two for them, hence I want to delay getting a mortgage closer to the time but not sure how well that would work.

Worst case scenario I have to re-apply for a mortgage closer to the time, if the delays occur. Financially I am in a good position so no problems in getting a mortgage and happy to complete but more concerned on losing the mortgage rate that I would have got during the original application (especially if rates go up)

Just checked First Direct's website and they don't do Help to Buy

crystalpinks · 8 February 2018 at 11:48PM

I've recently got my mortgage offer from Halifax for a new build (estimated completion May) and offer expires December 18

darkcloudi · 9 February 2018 at 6:43AM

Thanks, thats put my mind to rest, didn’t realise you can reserve for that long.

crystalpinks · 9 February 2018 at 10:56AM

We reserved just before Christmas for May 18 completion, they wanted a 28day exchange but we won't exchange til mid Feb (which they are fine about as long as they know things are moving).
My solicitor was initially cautious about exchanging too soon, but as offer doesn't expire til December we have a nice bit of wiggle room if there is any build delays !

pl187 · 9 February 2018 at 1:24PM

Some lenders will offer an offer extension on a case by case basis on new builds, like you said worst case scenario would be re-apply and potentially get a higher rate than the original offer.

You mention you will be using help to buy but own a property already, isnt the eligibility that you must be a first chime buyer?

kingstreet · 9 February 2018 at 1:30PM

pl187 wrote: »

Some lenders will offer an offer extension on a case by case basis on new builds, like you said worst case scenario would be re-apply and potentially get a higher rate than the original offer.

You mention you will be using help to buy but own a property already, isnt the eligibility that you must be a first chime buyer?

No. That any owned property be disposed of on or before completion of the new purchase.

New Build - Reserving Mortgage How Long?

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