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.

If TUI extend their free amendment policy to cover further than April we are definitely postponing a year Atleast. At the moment if we cancel or amend everybody loses all their money and we don't want to do that to our friends and family. So hopefully TUI will, and I'm worrying about nothing, but in case they aren't going to, we just want to understand our options

Can you cancel the wedding element, wait til next year, plan a small wedding at home then have a celebration day when you are away? Or..... you must still be within cancellation period, can you forfit the whole thing and pay the lost deposit for your family/friends?

Are you very tight on affordability on the mortgage offer?

£3,000 is not a big debt. So realistically unless you are right at the top of affordability then it shouldn’t negatively affect your offer.

If I were you I’d just deal with it when the time comes. If it’s a case of asking a family member for a £3K loan in order to solve a very temporary problem so that you get a house and the wedding, then swallow your pride and do it.

It’s quite a small calculated risk and I wouldn’t lose my house over it.

When is the house builders end of financial year? It's unlikely they'll let the house slip from one year to another.

I agree with pp that new build developers often run late particularly whilst building over the winter as weather can cause issues.

We reserved a plot in November and it should have been ready in March. As it happened, it wasn't ready until the end of May (bit of a pain as we had to rent in between houses).

If I were you I'd take the risk, it's all months away and the chances of it all landing at the same time aren't that high.

You could cut other spends to try and save some of the £3k so that it's not all make or break on one pay day.

It’s 5-6 months to go and a £3,000 shortfall, so £500-600 per month to make up. What can you cut or do without now? Extremely frugal Christmas etc

Surely you will have your mortgage approved and ready to go well before completion so why would the mortgage company even need to know about it?

We're already saving £1250 per month. DH has the opportunity for two bonuses before payment would be due but if covid lockdowns happen again business will struggle so they aren't highly likely. We are living as frugally as possible and anything left over will go into savings on top of the £1250. If we complete before the wedding and can use credit cards there's no risk, if we are delayed 2 or more months we're okay as we'll have time to pay off the credit card, it's just if it falls the same time or in the month after the wedding, and we don't manage to save enough or get a bonus that we'll have a problem, if that makes sense.

Just so frustrating because if we pull out on the house and

• Dh gets a bonus
• we manage to save the extra
• Covid postpones or cancels our holiday
• the house would of completed on time

Then we've lost the house for nothing!

Wedding/holiday obviously

@Helpplease181

Just so frustrating because if we pull out on the house and

• Dh gets a bonus
• we manage to save the extra
• Covid postpones or cancels our holiday
• the house would of completed on time

Then we've lost the house for nothing!

Precisely. There’s loads of variables and most of them don’t involve you needing to lose the house. In fact it’s more likely any of the above will happen so it’s not an issue.

So I’d go ahead, keep my fingers crossed and cross that bridge if and when it became necessary.

I know. It's just if the worst does happen and we can't afford both we either don't complete and lose £12k deposit and possibly get sued, or our families lose thousands and possibly hate us for prioritising a house over a wedding we asked them to commit to. I know it's unlikely but it's a terryifing thought. No one can really tell me either or won't happen though, it's just about whether the risk is worth the reward I guess.

In that worst case scenario, would you not be able to borrow £3,000 from family?

I know not everyone can, but if you have family paying to go abroad for your wedding I assume they’re not completely skint and are quite fond of you?

In this exact scenario I would discuss with my parents now and see if they’d be able to help in a hypothetical situation such as you describe.

@NoSquirrels

In this exact scenario I would discuss with my parents now and see if they’d be able to help in a hypothetical situation such as you describe.

This is an excellent ide @Helpplease181. I would absolutely discuss this situation with my parents and get their steer on it and see if they would be willing to help with the shortfall in a worst case scenario.

Parents already gifting 5k towards wedding (father of the bride) and paying stamp duty as a wedding present. Would feel beyond cheeky asking for anything on top. Ideally need to find it ourselves.

You’re not asking them to gift it, though. You’re asking if - in the unlikely scenario a perfect storm happens and the house is at risk - if they could temporarily loan you £3,000 which you’ll replay within 3 months with interest.

Hi Op, just wanted to say that the mortgage company would never know if you borrowed on your credit card just as the mortgage was due to be completed. It takes several weeks for balances at credit reference agencies to be updated so if the mortgage company checked your credit file just before draw down everything would be as they expect. I wouldn’t walk away from the house For this. Good luck!

I mean, of course ideally you’ll find it yourself - but you’re saying you definitely can’t guarantee finding it yourself, and perhaps you should pull out instead. I wouldn’t do that without speaking to my parents, because they’d be mad at me for not discuss a problem they could probably help with if the need arises.

Is there no way you could find 3K without a credit card. If you’re looking at April is there any way you could do overtime or get a second job perhaps at the evening or the weekend. I know it’s not ideal but it’s short term.
If you couldn’t make 3K you could find something.
Can you look at budget and make cut backs and savings?
I personally think you’d be mad to lose your house for a wedding but each to their own.

Have you actually asked family? Perhaps they’ll stick it on a credit card for you if need be.

If the builder hasn't started building your home yet then completing for April is a risk - most builders have a build programme of 18-22 weeks depending on weather. Legally they don't have to confirm a completion date to you until the house is painted internally.

I'm sure worst comes to worst the credit card is an option - losing your deposit over a wedding would be a stupid thing to do?

In regards to the credit check before competition I can confirm this is procedure. We've just waited 7 months to buy our house (not new build) but delays due to covid. We already had the mortgage in place but they do a final credit check just prior to completion. I was shitting myself, however it was fine (though we had been really careful). But we just tried to take our 0% finance on a new kitchen and it got rejected.. most likely due to the recent credit checks and mortgage as we could afford the monthly repayment.

Get your mortgage offer now - they last six months or so. They check your credit reference now, so its not really relevant how it is in April.

Just reading a bit more of the thread. Are you sure a 3K credit card would affect your mortgage offer...? If you can afford to save 1250 you must have atleast reasonable incomes and therefore I’d be surprised if a short term debt of 3K would make the lender u turn...

Op ask if your family will help, in this situation I would imagine they would be happy to put 3k on a credit card and you pay them off.

It's such a strange year for everyone, I would absolutely help my dcs in this situation if they asked. And would rather they ask than either lose the house or the wedding.

I was under the impression that when credit checks were done, it was on the basis of what you could borrow than what you actually had with credit cards? Ie if I had a card with a 10k limit then the affordability was based on if I used that rather than if I actually had?
Not sure whether a mortgage company or a financial advisor told me that but it was one of them a few years ago as they advised me to shut unused credit cards as it was all debt potential. So that might help - won’t matter if you spend it or not to them?