New build - Should I worry about a 6-month-plus gap between exchange and completion.

[Noamy]

We're buying a new build and there will be a 6-month-plus gap between exchange and completion. Exchange planned for mid-Dec and completion anticipated second half of Jun '22.

One thing I was concerned about was about mortgage validity but our mortgage approval just came through on Friday and we've got a new build mortgage valid until mid-Aug, so the mortgage wouldn't expire before completion, even if there's a 4-6 week delay.

I am, however, still worried about the rather long gap. For instance, what if - God forbid - our circumstances change before completion?
Do lenders do a credit check before completion after having done one at the time of approving the mortgage?

I guess we'll also have to watch our financial activities very closely e.g. not starting a new credit card until completion so it doesn't hurt our credit scores before completion.

Is it something that I should really be worried about?

In the same boat here

Need to exchange by the end of the month and it's not expected to be ready til June except our mortgage offer ends in July so any delay could screw us over

also having to rent when we've completed on our house (will be January hopefully)

I'm nervous too and seems a scary tule they have in place!!

Yes, it's very worrying, isn't it!

As far as a potential delay is concerned, your builder's track record esp during the worst of the lockdown should help you get a sense of what to expect.

I wonder if your solicitor may be able to request funds from the lender immediately upon the builder's notice of completion (which happens about 2 weeks before actual completion). Then I'd imagine the funds release would have happened within your original mortgage validity.

You may want to check with your broker or solicitor if this is how the lender would see it too.

In my case I'm just wary of the long gap and having to watch our credit. I believe lenders do a credit check at completion again even when you have a valid offer.

Is there somewhere to look at the history of their delays?

I used to work for a major lender and we only used to do pre completion checks if the offer needed to be extended for a longer time ie. six months or something. Offers for new builds were valid for a year but there always used to be a bit of leeway if things were running over and we would extend for a month without any issue. Anything longer than that and they may want to do a whole new offer and refresh/check your details again. May be worth checking with them to see what they say? Tis difficult though because, like you say, lots can change in six months to a year.

@redandwhite1

Is there somewhere to look at the history of their delays?

Nothing official AFAIK. I was thinking along the lines of checking with people who bought there over the last year or so if there was a delay to their completion.

@jiskoot

I used to work for a major lender and we only used to do pre completion checks if the offer needed to be extended for a longer time ie. six months or something. Offers for new builds were valid for a year but there always used to be a bit of leeway if things were running over and we would extend for a month without any issue. Anything longer than that and they may want to do a whole new offer and refresh/check your details again. May be worth checking with them to see what they say? Tis difficult though because, like you say, lots can change in six months to a year.

You mean there wasn't a fresh credit check done at the point of release of funds on completion if the original offer is valid? That would be a great relief! Do you know if your employer's approach was typical of other lenders too?

I've been obsessively playing around with the credit score simulator online and it's shocking to see how minor events can have an unexpectedly large impact on the score e.g. starting a £500 loan can drop your score by 15 points. Our scores are pretty good, and we don't have any plans for other borrowing until completion, but with a mortgage credit check you never know what the lender's threshold for a 'good enough' score is, and with the exchange done and deposit paid, the stakes are very high.

And then there's the worry about a pre-completion credit check failing if there's God forbid an unanticipated employment hiccup between exchange and completion.

The temporary loss of income itself wouldn't be an issue - we have some reserves to be a able to cover the mortgage for several months even without an income, but if lenders do a pre-completion credit check when you're unexpectedly between jobs that could be a disaster with the exchange already done and deposit locked away

I don't think they do, our mortgage advisor only said all the checks needed doing if it expired and we needed a whole new application

With interest rates on the up if ours expires and we have to get a new one I won't be happy!!

@redandwhite1

I don't think they do, our mortgage advisor only said all the checks needed doing if it expired and we needed a whole new application

With interest rates on the up if ours expires and we have to get a new one I won't be happy!!

That sounds promising. I'm probably worrying far more than I ought to.

Talking to our broker tomorrow to see what he says.

No, nothing was ever done before completion. The offer was literally issued and then the file sat in a drawer until we received the request for funds from the solicitor. It only ever got looked at again if there were queries. I am talking 10 years ago though...