New homes have many benefits, including the ability to put your own stamp on a property that’s never been lived in.
But construction delays are fairly common, sometimes resulting in a mortgage offer expiring before the property is finished – and you’ve had chance to complete.
How can you minimise the risk of a mortgage offer expiring?
The most important aspect is finding out from your mortgage broker how long the offer is valid for. They typically last 3-6 months but they vary from lender to lender. Often, your mortgage advisor will be able to weigh up the situation and recommend banks that provide the longest mortgage offers.
Some lenders will offer specialist new-build products where nine months or more is available.
Is it possible to request an extension?
If you’ve already exchanged contracts but your mortgage offer is coming to an end, it may be possible to get an extension. This will depend on your lender, and they may want to know an expected completion date before they will extend it.
If your financial circumstances have changed, they may treat it as a new application, running new credit checks, affordability assessments and a new property valuation.
Will you need to reapply?
If the lender doesn’t offer an extension, you may be able to reapply for the same deal or look for an entirely new mortgage offer.
It is always better to forward-plan when it comes to buying a new build off-plan. Speak to the developer and keep in regular contact with them to ascertain if delays are likely. Remember that unexpected delays can be caused by spells of unforeseen bad weather, so it’s a good idea to build some contingency time into your mortgage planning.
We highly recommend that, before putting a deposit on a new build, you speak to us – as a whole-of-market broker – to discuss all of the offers available to you.
Contact us for a free, no-obligation consultation:
Please note: Fees may be payable at a later stage. Your home may be repossessed if you do not keep up repayments on your mortgage.
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