Mortgage Offer Letter - But house unfinished

[gln04]

I have just received a mortgage offer letter for a FTB property.

The problem I have is that the house is not finished. It is about 8weeks away from completion. The bank will not guarantee the funds are available until the house has been completed but the builder will not complete until a contract has been signed.

It is alot of money to hand over and then have the mortgage rejected.

What are the chances if I go ahead, sign contracts, hand over a 10% deposit, of the bank not approving the mortgage?

 

[tenchi-fan]

There is a fair chance the bank would not extend their approval.
At least make sure there is a clause in the contract which says you will not be contractually obliged to purchase the property if you cannot get the loan and state the max you can lose is the deposit.

 

[fizzelina]

At least make sure there is a clause in the contract which says you will not be contractually obliged to purchase the property if you cannot get the loan and state the max you can lose is the deposit.

We had this clause inserted on our house purchase, that if the bank did not give the mortgage then the contract was no longer valid and we did not have to buy. The builder was agreeable enough to it. It also meant that he finished the house asap as he wanted us to draw down the mortgage while we had the approval loan letter before it would lapse.

 

[anuj21k]

I will say make sure you include this clause that in case of mtg. not approved by bank deposit will be returned. I think it should be acceptable in these times.