What would happen if we exchanged but couldn't complete?

[Helpplease181]

Due to complete very shortly on our house, we have the full deposit available which will be paid on exchange of contracts.

We won't complete until April/May as the properly isn't built yet. My worry is that at the moment we are tied into a big abroad wedding in May that we are not yet within our rights to cancel (Covid..) We booked it well over a year ago, and although we'd like to postpone a year we have other people's money wrapped up in it, so if/until the company cancel we have to assume it's going ahead. We have cut it to the absolute bone and got rid of all extras.

If we complete in April, then we will be fine for the wedding in May as we're currently estimating we'll be around £3k short at the maximum which we can put on a credit card and pay off with DHs November bonus.

My worry is if there are any delays (they haven't started building our house yet) that we may end up having to pay for the wedding before we complete. This means putting £3k on a credit card before our mortgage funds are released, which could in turn affect our affordability and lead to the lender pulling out.

If this happened, what would happen? Would we lose our deposit, and the house? Would they give us a couple of months to pay off the credit card? I'm beginning to panic that maybe we shouldn't exchange, but we so desperately want this house.

Not sure I understand....you would pay for the wedding and lose the house? Sure it should be the other way around?

@midgebabe

Not sure I understand....you would pay for the wedding and lose the house? Sure it should be the other way around?

If the wedding happens first and we just don't pay and call it off at the last minute to prioritise the house we will cost our families thousands. It feels like our hands are tied

Very unlikely to happen with a builder. But if it does and it’s their fault for the delay they must pay you.

@GrumpyHoonMain

Very unlikely to happen with a builder. But if it does and it’s their fault for the delay they must pay you.

Can I ask what you mean? Very unlikely to be delayed?

Building companies in the UK usually build houses very quickly if they are sold, within a matter of months. Everybody I know who bought newbuilds this year had their houses built within 3-6 months of them putting the offer in.

So it’s very likely you will be able to complete sooner than April.

Actually there is usually a clause in a new build contract to allow for delays. I'm sorry OP but I think delays to new builds are very common. I wouldn't take this risk personally because if the mortgage is declined and you have exchanged and can't find an alternative you forfeit the deposit and are liable for all costs unfortunately.
I hate this about new builds and the way the exchange is so so so far in advance of the completion.
Have you discussed what happens if the mortgage provider don't allow you to draw down the funds at the last minute? (Which btw is unusual but I don't think completely unheard of for last minute due diligence on their part given current climes).
Personally I wouldn't exchange until I could tell for certain what was happening with the wedding.

I know of a local development that ran massively over. Like six months over for each new build. Do proper research on the challenges OP - especially with a winter build.

If it's one of the big builders building on an established development you can also usually get a view from reviews online about how long they're taking to build and whether people are experiencing significant delays

It's a small local developer. If it over ran by a couple of months we'd be fine as we'd have time to pay off the credit cards from the wedding. We may not need credit cards for the wedding but that's relying on a bonus in January from dhs work that won't happen if we have another lockdown. Our worry is if we have to complete literally just after the wedding and can't afford it. We need to complete before and we just can't rely 100% on that being the case. I feel so stuck

Assuming that you're family is wealthy as they're paying 'thousands' for your wedding, why not just ask one of them for a short-term loan?

We're already having as much help as is available. It's not guaranteed we'll be short but there is a risk and I just don't know what I'd do if I got to that point and couldn't afford the wedding without potentially jeaopardising completion and therefore having to pick between fucking our family over or losing £12k and possibly being sued by the developer. I just want to know if realistically a lender would pull an offer for spending on a credit card in between offer and completion, and if they did what our options would be? I want to be prepared for exactly what we could face before we decide to exchange.

You’d lose your deposit. The developer would be entitled to sue for any losses.

The lender is unlikely to pull your offer for a credit card spend, but they do rolling credit checks so it’s possible. If they weren’t happy they’re entitled to pull your mortgage offer. Then you couldn’t pay for the house. Then you’d fail to complete, be in breach of contract, lose your deposit and be liable for the losses of the developer.

Forgive me OP but from your posts you know exactly what the risks are - what do what people to say? They can’t give you an assurance that isn’t there.

@LyingDogsLie1

The lender is unlikely to pull your offer for a credit card spend, but they do rolling credit checks so it’s possible. If they weren’t happy they’re entitled to pull your mortgage offer. Then you couldn’t pay for the house. Then you’d fail to complete, be in breach of contract, lose your deposit and be liable for the losses of the developer.

Forgive me OP but from your posts you know exactly what the risks are - what do what people to say? They can’t give you an assurance that isn’t there.

I'm sorry you're right. I just don't know what to do. I guess we have to pull out on the house. I just wished we'd never booked the stupid bloody wedding.

Oh OP I massively feel for you. This is a really rubbish situation. I would walk away from the wedding before you lose the house actually - as you say it's unlikely to come to it but if it did that is where I would take the gamble, not on a house that I love and really want

If it was just our money we stood to lose I would but our families have paid for their holidays to attend and I can't do it to them. It's so frustrating as we have to decide now whether to exchange or not and I bet if we don't Covid will call the wedding off of DH will get a bonus and we'll of lost the house for nothing. It's just such a big gamble.

But you can all still go on holiday, you can just cancel aspects of the wedding. I'm assuming their holidays will go ahead regardless of the wedding?

Would they want you to do that? To lose the house or your deposit?

Your families can still go on the holiday even if you don’t get married.

If it came to it could a family member take out a credit card to pay the £3k for the wedding & you pay it back once the house is sorted?

I'd feel awful asking. Oh I just don't know what to do.

I would speak to the lender and say you are planning purchases for next year but given uncertainty of builders timescale would a credit card balance affect the mortgage? And also speak to the builder and say you need the house completed by Easter at the latest and have you any reason to worry on that front?
It sounds like with some squeezing/trimming you could probably reduce the 3k a bit given you have some time to plan it.

I work for a house builder so can tell you that regardless of delays (well normally with in 6 months) you would be in breach of contract and lose your deposit or pay a daily interest until you could complete.
Once exchanged you would be subject to completing on 10 days notice

@thetigerthatcamefortea

I work for a house builder so can tell you that regardless of delays (well normally with in 6 months) you would be in breach of contract and lose your deposit or pay a daily interest until you could complete. Once exchanged you would be subject to completing on 10 days notice

We've been told we need to exchange in the next few weeks, but we can't complete until April as the house isn't built? I'm confused. If we don't need to exchange for a while longer that buys us some time to figure things out so that would be ideal if it needs to be within 10 days of exchange that we complete.