Mortgage retention – tempting fate?!

Great news we have had our mortgage offer WOOHOO sadly the bad news is that they have decided to put a retention on it Boo Hiss!

Was I tempting fate by saying the valuer hadn’t recommended a mortgage retention I wonder… Anyway the amount of the mortgage retention is £5,000 which I suppose in the scheme of what we are borrowing isn’t a horrendously huge amount, but still that 5k would be better spent immediately on the house. We are quite lucky in that we do have a budget put aside for the work we are going to do to the house so the 5k will have to come out of that to pay for the house.

The conditions of the mortgage are that we have to meet the 3 things on the valuers list within 6 months and they will release the 5k to us. All well and good except when you see that the 3 things listed are damp (okay that’s fair enough) and problems with the kitchen floor (again fair enough we knew about that needing attention) but number 3 is complete refurb inside and out which is a bit on the vague side if you ask me. After all everybody is going to have different ideas on complete refurb, I could take it to mean paint everything and make it look pretty and job is done, or I could think it means rewire, replumb, replaster, new kitchen, new bathroom, new windows….So we are seeking clarification on this point since the amount of work will pretty much decide whether we can get it done in the timeframe they are insisting on.

So should you be subject to a mortgage retention make absolutely sure you check the time frame you have to get the work done by to get the retained funds released. A nice little extra that they put in is that you have to pay upfront for the reinspection fee, so you get the mortgage, they charge you a handsome arrangement fee, and many other fees as well then because they decide against the valuers recommendation to put a mortgage retention on the mortgage offer then you have to pay more fees to get the money they’ve promised you. Of course if they didn’t reinspect you’d just say you’d done the work without actually doing it (or at least that’s how they think I suppose)

So with regard to the clarification of what we need to do for the funds to be released I rang and spoke with the mortgage company, the lady on the phone agreed it was a bit vague and open to interpretation. However she couldn’t just go and get clarification, she gave me a fax number and I had to get my financial adviser to fax them asking them for clarification, they then go back to the valuer, he will no doubt think about it for a few days before responding, they then report back to my adviser who reports back to me!!!! How incredibly long winded is that!

Anyway it’s the weekend and we have the mortgage offer so I don’t care I’m celebrating tonight

House survey results are in….

Yes at long last the results of the house survey are in, this is a nerve wracking stage of the process as you start to worry the house has lots of things wrong with it that you didn’t spot. This is also the stage where the mortgage company can put a retention on the mortgage offer. What’s a retention? Good question….if you are buying a property that needs a substantial amount of work then depending on the severity of the works then the mortgage company can offer you a mortgage but hold (or retain) some of the money back until the work is done. Now a mortgage retention isn’t the end of the world but if you are very close on the finances then a retention may just make the purchase impossible, which is more than a little bit upsetting when you’ve paid for legal searches, arrangement fees and of course the survey fee! Anyway getting diverted slightly there

So our house survey was great news, in that they have said it needs damp work, full renovation inside and out and that there is a problem with the joists in the kitchen floor. We are very pleased for two reasons….one as I’m sure you’ve guessed the mortgage company haven’t been advised to put a retention on their offer…Woohoo and secondly because they have also put a valuation on for once the work is completed which is around £20,000 more than we thought it would be worth….of course we have to do the work and I’ve a feeling this house will become a bit of a money pit mainly because I really want to do the house justice and because I’m getting more expensive tastes by the day! The third thing…yes I know I said two main reasons we were happy with the house survey but I just can’t count … so the third thing was that they didn’t tell us anything bad that we didn’t already know and really a house survey doesn’t get any better than that.

There are varying degrees of house survey ranging from the really basic one that we went for right up to a full survey.

Why did we choose the basic house survey rather than a full structural survey?

We decided that although everyone recommends the full structural survey the cost is high and there are no guarantees and even if you find something afterwards that was totally obvious to someone with knowledge the surveyor is not liable for anything. For instance if the house had large recent cracks on the outside walls then you’d be worried about subsidence or something similar but say the surveyor didn’t even mention them in his report you would still have no comeback and no compensation, nothing, nada, zip, zilch. So we figured what is the point then it isn’t protecting us, (I should mention here that my partner is in the plumbing and bathroom fitting trade so well aware of what to look for) if you aren’t a builder and don’t know one you can drag along for an opinion then you might want to go for a full structural survey just remember it guarantees nothing.

So now the survey results are in, we are still waiting for the legal searches to come back (well I think we are although the solicitor hasn’t said anything in ages so will be chasing them up tomorrow) the mortgage company is asking for clarification on a couple of bits of paperwork we supplied, but we should clear that up tomorrow as well so fingers crossed for the mortgage offer by the weekend….