Mortgage worry (another lending thread)
Discussion
I thought about replying to one of the many 'banks / lending' threads but decided to start a new one.
I am possibly in a bit of a pickle.
Mid October, we did a deal on a new house. Somewhere we want to live as oppossed to an investment.
We will be keeping our present place as it's where my wife wants to live forever. The move is to bring us closer to family during difficult times (say 10 years or so).
Our current place will need some substantial work to make it suitable to lease. This is in the plan.
We had an "agreement in principle" with a lender for the new place but this evening, we learned that they've pulled it.
They apparently (through IFA) state that there's; "no affordability issue" yet they've blocked it. They say that it's the fact that our current place isn't being sold that prevents them from proceeding. Everything was disclosed in the application.
This is being appealed.
Now, we have alternatives but I'm absolutely bricking it that we won't be able to get things sorted in time (BTW, Scottish law).
I'm not seekeing any advice but rather flagging how fickle the banks might be just now despite what AD says.
Fingers crossed.
Cheers,
Eric
I am possibly in a bit of a pickle.
Mid October, we did a deal on a new house. Somewhere we want to live as oppossed to an investment.
We will be keeping our present place as it's where my wife wants to live forever. The move is to bring us closer to family during difficult times (say 10 years or so).
Our current place will need some substantial work to make it suitable to lease. This is in the plan.
We had an "agreement in principle" with a lender for the new place but this evening, we learned that they've pulled it.
They apparently (through IFA) state that there's; "no affordability issue" yet they've blocked it. They say that it's the fact that our current place isn't being sold that prevents them from proceeding. Everything was disclosed in the application.
This is being appealed.
Now, we have alternatives but I'm absolutely bricking it that we won't be able to get things sorted in time (BTW, Scottish law).
I'm not seekeing any advice but rather flagging how fickle the banks might be just now despite what AD says.
Fingers crossed.
Cheers,
Eric
You need to formal offer to be sure of proceeding with any confidence. Did you get one, or just a lending decision in principal given verbally?
If you have the mortgage offer formally, that is a start, but the lending decision could still be pulled if there is a valuation issue. it may be their criteria has changed, but they shouls abide by the original offer letter, so long as yourt things stack up. However, if valaution is an issue, meaning you are borrowing more than the initally calc'd % on the new house, you may have issues you describe unless you look to sell the other house.
Find out if it is a lending decision based on valaution. You then have to consider your options with the seller if any, I know Scotland is different from England and Wales, where you would merely make a lower offer!
Banks are very very nervous and it will not change til well into Q2 2009 I am afraid. Savings rates will be very low, loan rates very high and they will be picky on new business until they see how the recession hits their current potfolio of loans.
If you have the mortgage offer formally, that is a start, but the lending decision could still be pulled if there is a valuation issue. it may be their criteria has changed, but they shouls abide by the original offer letter, so long as yourt things stack up. However, if valaution is an issue, meaning you are borrowing more than the initally calc'd % on the new house, you may have issues you describe unless you look to sell the other house.
Find out if it is a lending decision based on valaution. You then have to consider your options with the seller if any, I know Scotland is different from England and Wales, where you would merely make a lower offer!
Banks are very very nervous and it will not change til well into Q2 2009 I am afraid. Savings rates will be very low, loan rates very high and they will be picky on new business until they see how the recession hits their current potfolio of loans.
Thanks for that.
We've never seen anything in writing and have accepted what the IFA has said. Let's, therefore, assume it's verbal.
The decision isn't based on valuation. The lender stated at the start that they'd require their own "independent" valuation survey. This hasn't been undertaken.
Goal posts are being moved and folks should take care.
Cheers,
Eric
We've never seen anything in writing and have accepted what the IFA has said. Let's, therefore, assume it's verbal.
The decision isn't based on valuation. The lender stated at the start that they'd require their own "independent" valuation survey. This hasn't been undertaken.
Goal posts are being moved and folks should take care.
Cheers,
Eric
Speak directly to the lender who has stopped the matter progressing. Make sure they tell you exactly why they have stopped short of a formal offer and get a letter detailing what they require to progress to that stage.
It may well be that they do not want to lend you the money for the new house until you have a contract in place to rent out the current one so that your incomings and outgoings balance as per their lending criteria. The potential lender may also not be fully aware of your personal financial situation if the IFA you are using has not passed the relevant information onto them.
They may also be concerned about the price the developer is asking for the new house. If it is completely new it is likely to carry a premium in price terms to comparible houses in the local market. In the current market the lender may be looking to you to carve out a new deal with the developer so that your exposure (and the lenders) is reduced to be within their current risk guidelines.
Basically get your hands on as much information as possible and then decide if you can meet the criteria to complete the deal.
It may well be that they do not want to lend you the money for the new house until you have a contract in place to rent out the current one so that your incomings and outgoings balance as per their lending criteria. The potential lender may also not be fully aware of your personal financial situation if the IFA you are using has not passed the relevant information onto them.
They may also be concerned about the price the developer is asking for the new house. If it is completely new it is likely to carry a premium in price terms to comparible houses in the local market. In the current market the lender may be looking to you to carve out a new deal with the developer so that your exposure (and the lenders) is reduced to be within their current risk guidelines.
Basically get your hands on as much information as possible and then decide if you can meet the criteria to complete the deal.
Kiltie, AIP's are pretty meaningless. They are simply the lender saying that all things being equal, they are prepared to lend you the money you want. ETA and as you have found out they are not binding in any way.
Alot of lenders are changing their criteria at the moment, so it might be you have been caught in that.
It might also be that the lender has pulled that deal from the market place.
Alot of lenders are changing their criteria at the moment, so it might be you have been caught in that.
It might also be that the lender has pulled that deal from the market place.
Edited by scotal on Thursday 27th November 10:10
Kiltie said:
Goal posts are being moved and folks should take care.
Cheers,
Eric
Unfortunately this has been happening for many months in BTL mortgages. We've had full offers withdrawn, submitted applications that meet criteria rejected for the most paltry of reasons, with the criteria being twisted to give reason, it's a bloody mess at the moment.Cheers,
Eric
We got a 'mortgage promise' from a lender when we wanted to buy our place. All went swimmingly until after we'd put an offer in. Then the 
s withdrew it!!
Ended up speaking to a chap called Alex Mehrban. He did us proud and sorted us out all at quite short notice and got us a blinding fixed rate deal.
Details...........Alex Mehrban, Oakhill Mortgages, 0870 064 1111.
That was a few years ago and he might've moved on, but I can't recommend him highly enough.
s withdrew it!!Ended up speaking to a chap called Alex Mehrban. He did us proud and sorted us out all at quite short notice and got us a blinding fixed rate deal.
Details...........Alex Mehrban, Oakhill Mortgages, 0870 064 1111.
That was a few years ago and he might've moved on, but I can't recommend him highly enough.
Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff