any potential pitfalls with delayed mortgage draw-down

serotoninsid

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I'm just trying to work out if there are any pitfalls with the following scenario.

Property to be purchased for €100K with 50% financing being needed to complete the purchase. The plan would be to drawdown an additional €50K (back of fag packet amount at the moment - but not to exceed this...if anything, it will be lower).

Can a mortgage be drawn up giving the customer flexibility as to when they come back for drawdown - or partial drawdown- of the additional sum? ie. will a timeline be fixed to this? Also, is there any possibility of getting caught between stools ie. between purchasing - and then requesting additional funds for refurb later on? Can the bank wriggle out of their commitment in this respect?

Lastly, in this instance ie. a refurb - is it safe to assume that the additional drawdown is made payable to the customer ie. they don't insist on writing the cheque to the builder?
 
To answer last question first, drawdown will be payable to your solicitor and not to you or builder.

Main danger in delaying any drawdown is that the goalposts change and the bank needs up to date income details before drawdown. Now that might be fine with you but if for any reason your circumstances did change, usually with a retention like this for work to b done the lender will have rough timeline so you would probably need to check with them.
 
If it is a fixed rate mortgage, I think that the rate will be per the day of final drawdown. This could affect you if there was a significant delay.
 
If it is a fixed rate mortgage, I think that the rate will be per the day of final drawdown. This could affect you if there was a significant delay.
Thanks for that QED - but I'm not a big fan of fixed (although i know there are benefits).
wbbs said:
To answer last question first, drawdown will be payable to your solicitor and not to you or builder.
Ok, that's perfect.

wbbs said:
Main danger in delaying any drawdown is that the goalposts change and the bank needs up to date income details before drawdown. Now that might be fine with you but if for any reason your circumstances did change, usually with a retention like this for work to b done the lender will have rough timeline so you would probably need to check with them.
This is very much preliminary - but this is the sort of info I wanted to be aware of - thanks.
 
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