Newbuild mortgage offer will expire before completion - any tips? Mrs_H17

#1
Hi,



My husband and I are in the very early stages of purchasing a new build through Taylor Wimpey. We are due to officially sign our reservation paperwork in a couple of weeks and then will meet with mortgage advisor and do all of the applications a few days after. Although we are being told we need to exchange within 28 days of reservation, our mortgage will likely expire before completion. The house is due to be finished in October / November. We are of course really anxious about having to reapply in 6 months and being declined and then losing our deposit.

Can anyone suggest anything we can do / any tips other than pulling out which we really don't want to.



We are first time buyers so everything is all very scary and daunting for us.



Any advice would be much appreciated



Thanks

#2
As you haven't exchanged yet:



* Ask TW for an extension on the 28 days, so your mortgage offer will still be valid when the completion is projected.

* Negotiate a term in the contract that if they do want you to exchange within 28 days, TW has to pay you any costs associated with applying for a new mortgage when your current offer expires.

* Neither of the above and shoulder the costs of a second mortgage application and the risks thereof yourself.



In my case, the build of my current house ran into legal problems between the developer and a subcontractor. I ended up with a year delay. I had them include a clause saying if the house wasn't completed by the time the original mortgage offer expired, I was free to walk away without penalty at any point up till notice to complete was given and all extra costs would be for the developer. They didn't like it, but they agreed to it in the end.

#3
Chances are, your solicitor will not permit you to exchange contracts if you don't have a mortgage offer which will outlast the build programme.



Use a lender with an offer period longer than six months. There are several in the newbuild sector. Others offer easy extensions.

#4
We had the same thing and our developer (Bellway) wrote a clause into the contract which said we could cancel and get our deposit back if our mortgage offer could not be extended due to no fault of our own.



We were fine to be fair but was a risk to take if not.



My concern was the bank changing lending criteria in 6 months and refusing to extend the offer. The developer was fine to put this clause in as long as it excluded things which were our fault like getting a car on finance in the time between and being refused because of this.

#6
Get a good broker who knows new build processes. We got our mortgage through Skipton. We were able to extend from 6 to 12 months before the offer expired. Just had to confirm no significant changes and be credit checked again.

#7
Just so you know that TW are quite flexible as long as they see progress is being made. I missed my 28 days for having missive signed due to mortgage offer not being in and TW extended this to the end of March now. I'm moving in end of April though.

#8
The 28 day thing is nonsense.



Its just so they don't get people pay the reservation and take months to exchange.



Ours took nearly double that and Bellway didn't care as long as they could see the delay was not on your part.

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