Buying a new house - need mortgage approval?

[allsquare]

I might be needlessly panicking but here goes. I am a first-time buyer. I bought a new house last week and paid the €5,000 booking fee. The remainder of the 10% deposit is due in 14 days. I have the cash for the deposit in my account and I presume this will be paid through my solictitor. Completion is due in 1 year's time. From reading through some of the other threads on this topic, it appeears as though you need to have official mortgage approval before you pay this deposit? Is this the case? I assumed since I have the deposit in full that I would not have to apply for a mortgage until nearing completion (I don't anticipate any difficulty in getting a mortgage, and my parents would act as gauranteurs, if for any reason there was). Can anyone enlighten me please?

 

[Sarah W]

Yes, you will need a full mortgage offer (not just approval in principle) in the next 14 days as you will be signing a binding contract to purchase the property. You solicitor will not return the contract unless an unconditional mortgage offer is in place.

Time to start panicking!

Sarah

www.rea.ie

 

[Aido]

You should have a formal mortgage offer from a lender before you sign contracts - your solicitor will require this as it is a written guarantee that the funds will be in place and that you are capable of completing the contract. Should you for any reason fail to secure a mortgage after contract signing, you will forfeit your deposit and you are also liable for your solicitors fees, the builders solicitors fees and all other costs borne by the builder due to you reneging on the contract. In summary, it's not mandatory but you should get it sorted now, by the time you get your documentation together and submit your application it should take about two weeks to turn it around. I wouldn't panic at all, just get your skates on... also if you need a little extra time, your solicitor should be able to negotiate with the builders solicitor for an extra few days.