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Vendor has owned house less than six months

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  • Julfulbub
    Julfulbub Posts: 40 Forumite
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    PasturesNew wrote: »
    I've heard of this, it is to do with money laundering - a lot of lenders are now not mortgaging properties where the current owner has had it less than 6 months.

    So it's not uncommon.

    This is not giving me much hope. Seems a silly way to deal with the problem. Surely there is a way of checking out the vendors purchase rather than penalising people. If it is not uncommon, why isn't this common knowledge? A lot of people could get caught by this when buying.
  • MiserlyMartin
    MiserlyMartin Posts: 2,236 Forumite
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    Ok. This is a new one on me then. Sorry to hear about this. I hope it works out in the end for you. What if you made some kind of agreement to buy the house a few months later to get around this or don't you want to wait that long? It also stuffs up the sale of your house if you have a buyer.
  • Milliewilly
    Milliewilly Posts: 1,081 Forumite
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    Julfulbub wrote: »
    Wouldn't have thought so as it went through valuation and they issued offer


    do you know how long the seller has owned it - can you hang onto your mortgage offer until 6 months is up?
  • Julfulbub
    Julfulbub Posts: 40 Forumite
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    He only bought it about 6 weeks ago. We have a FTB chomping at the bit to get in our place and I don't really want to move out and rent. I also don't think vendor would wait another 4.5 months for us, I think he would remarket property as not all lenders enforce this restriction. Plus our mortgage offer was only good for 3 months. We could apply for a mortgage with another lender but we would never get the deal we have with our current lender and it means starting over, paying for another survey etc and then we could lose our buyer. The whole thing seems silly and such an inconvenience.
  • Comyface
    Comyface Posts: 669 Forumite
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    PasturesNew wrote: »
    I've heard of this, it is to do with money laundering - a lot of lenders are now not mortgaging properties where the current owner has had it less than 6 months.

    So it's not uncommon.

    I have too, but I thought that it only applied to the current owner, IYSWIM. So, if you've owned a property for less than six months, you can't remortgage it. Selling it shouldn't be a problem in that case. I think it should get through the 'exceptions dept' okay. Keep us informed Julfulbub, could be useful for others to know, and good luck. :)
    Are the words 'I have a cunning plan' marching with ill-deserved confidence in the direction of this conversation? :cool:
  • clutton_2
    clutton_2 Posts: 11,149 Forumite
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    lenders are worried about investors buying Below Market Value properties and then immediately selling them on for huge profits - i believe they worry that the original vendor could come back and say "they were pressurised into a sale below market value without the full details of the deal being explained to them in full"

    since a couple of months back all SARB (sell and rent back) sales property investors have to be registered with the FSA and so i guess lenders are very cautious just now
  • david29dpo
    david29dpo Posts: 3,748 Forumite
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    Its the lenders. Money laundering plus any excuse not to give a loan.
  • Richard_Webster
    Richard_Webster Posts: 7,646 Forumite
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    I've just had a client applying for a Halifax mortgage where an investor bought all the flats in a block from a builder "off-plan". The contract has not yet been completed and he wants to sell on at a profit to my client. The price looks about right and doesn't seem overegged. Investor is paying less to the builders but I guess at the time the contract was entered into they were glad of the certainty of the cash flow. The builders are selling other flats at around the same price now and even encouraged my client to buy from this investor!

    Halifax will not lend because seller has owned less than six months (in fact he hasn't owned at all yet!). Client very cross because Halifax didn't mention this criterion in the stuff she read.

    I've always seen the 6 months rule (we have to tell lenders about seller owning for less than 6 months) was to allow them to double check their valuation. There could have been cases in the past where the second sale price was inflated and some silly valuer agreed the figure.
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
  • poppysarah
    poppysarah Posts: 11,522 Forumite
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    But if it's not sell and rent back, what actions are available to the original seller who then feels they were ripped off?

    (And I mean normal sellers not those going bankrupt)
  • HAM
    HAM Posts: 1 Newbie
    edited 3 November 2009 at 5:36PM
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    My partner and I have just bought a property at auction with the view to sell on as quickly as possible, and we have just been advised a similar thing by our solicitor...that we may have trouble finding a buyer whose lender is willing to offer a mortgage on a house we've owned for less than 6 months. Boohoo!! However, I was wondering if this would still apply after we have carried out works to improve the house, thus adding value to it?
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