Help to Buy Authority to Exchange Contracts from SAM Conveyancing
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Help to Buy Authority to Exchange

07/02/2022
40,562
5 min read
Help to Buy Authority to Exchange (ATE) is a document which Help to Buy issues to your conveyancing solicitor granting them the right to exchange contracts with the developer of your property.

Whereas in a normal conveyancing purchase you can exchange as soon as you are ready, with a Help to Buy purchase you cannot exchange until you get the ATE. This adds 5 working days to the exchange right at the point where you want to move quickly.

This article gives an overview of this final stage of the Help to Buy Application Process and explains what you can do to speed it up:


    1

    What happens before you can request an Authority to Exchange?


  • Authority to Proceed In Date. Your Help to Buy local agent sends the Authority to Proceed document (ATP) to you, your property developer and your solicitor at the start of the transaction and it lasts for 3 months.
  • New Build enquiries satisfied. Your solicitor reviews all of the legal documents and raises enquiries which the developer's solicitor replies to.
  • Mortgage Offer. You need to get your mortgage offer and this is issued by your lender to your solicitor. Your solicitor passes on what is called the Help to Buy charge document to the lender. This sets out the nature of the second charge on the property which paying back the equity loan has.
  • Report on Title. Your solicitor reports to you the information about the property you are buying and sends documents for signing.

    2

    Request Authority to Exchange

At least 5 days before the planned exchange date, your solicitor sends Help to Buy what is known as Solicitor's Form 1 Undertaking and includes:

  • The Developer’s UK Finance Disclosure of Incentives Form;
  • Certified copies of identification documents;
  • Evidence of source of funds;
  • A copy of the Mortgage Offer;
  • First Time Buyers Declaration; and
  • A copy of the valuation.

Help to Buy Authority to Exchange Refused

Here are some examples of how your ATE could get refused:

  • Incentive greater than 5%. The Solicitor's Form 1 Undertaking includes the Council of Mortgage Lenders (CML) form which lists any incentives the developer has offered you, such as turfing your garden, white goods, paying your stamp duty or other discounts. The total value of any monetary incentives should not be more than 5% of the value of the property.
  • Mortgage Offer expired or withdrawn. If your mortgage offer expires or is withdrawn then Help to Buy will refuse your ATE. Read more - Can a mortgage offer be withdrawn?


Within 5 working of receipt of the form and assuming all the forms are accurate and consistent, your Help to Buy agent approves the exchange and issues your solicitor the Authority to Exchange.
Getting an Authority to Exchange for a Help to Buy purchase

    3

    When is completion after ATE?

Your solicitor exchanges contracts between you and the developer's solicitor. As with any exchange of contracts in conveyancing under England and Wales law, this commits both you and the developer to complete the purchase.

Hypothetically, if you were to pull out after this point, you stand to forfeit your deposit.

Frequently Asked Questions

Your Authority to Exchange is valid for 28 days. If this period expires (it shouldn't normally) your solicitor will have to submit a new Form One.

Your solicitor submits a Confirmation of Exchange Form to Help to Buy within 2 working days of exchange. Within this form it confirms exchange took place and that completion is on notice or on a specific date.

Where the property is already built, a completion date will be set on the day of exchange.

Where the property has not yet been built, completion will be on notice which means once the property is built, the developer's solicitor serves you with a notice to complete. You have 10 working days to complete. Read more - what happens between exchange and completion).

Before the completion date your solicitor sends the Solicitor's Form 2 Undertaking to Help to Buy which is essentially a request for the authority to complete and it includes:

  • Certificate of Title;
  • Direct Debit Form; and
  • (if applicable) Any updated Mortgage Offer or Valuation Report

Within 3 working days of this Help to Buy agent issues the Confirmation to Developer. This confirms that the Help to Buy funds will be released to the developer and that the developer can go ahead with completion.

How long does it take to release the money?
Help to Buy requires 12 working days to release the funds to the developer, although some developers are happy to complete in advance of them receiving the funds, subject to the Confirmation to Developer being received.

Smaller developers might need to allow enough time for the equity loan portion to be transferred from the Government and they should allow 15 working days for the money to come through, just in case of any delays.


Standard mortgage normally last 6 months. If the building of your Help to Buy property is delayed, your mortgage offer might expire.

Depending on your lender, you might be able to get an extension of a month, for example, but they do not have to offer you this facility. If you cannot get an extension, you'll have to start - and pay for - a whole new mortgage application.

For this reason you should remain aware of your credit rating and beware of your circumstances changing negatively: you might not be able to secure as large a mortgage in these circumstances.


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