Bank waited to tell me they have a problem

Thanks guys, it's all come to a head now as the bank has made it clear that they won't accept our position, which is good because it makes the decision for me. That decision is partly never to take a mortgage with this bank They have wasted so much of my time, meaning my purchase has been delayed by weeks because of them, and they have potentially affected my ability to take a mortgage with someone else as well, so I couldn't be angrier at them. Obviously a !!!! up on their side as they'd spent money too, so I'll console myself with the fact that their mistake has cost them money.

It doesn't feel right to name the bank, sorry, but I will say it's one of the big ones. But I'm posting this update for anyone in future hoping to do what I was hoping to do - the answer is "don't bother". It doesn't matter how much sense it makes for everyone and how well you address each and every one of the bank's concerns (my friend was willing to sign the form to say he has no right to claim the money back from me, but the bank still said no). If you don't fit in their box, they don't care. So they have lost my business and they have lost the money they have spent so far.

Me having to take a 95% mortgage is worse for everyone - it's riskier for the bank than me taking a 90% mortgage and having a completely unsecured loan for 5% more, it means I have to spend more money, and it means my dear friend can't help me, which is all he wanted to do. We literally addressed all of their concerns but they just didn't care. The error we made was assuming there was any logic in what the bank requires.

Ah well, onwards and upwards. Need to start looking at 95% mortgages now...

Warby, I'm afraid I just don't agree. We asked them if they would accept a gift from my friend, and a vague intention that I repay that gift over the next few years by a series of smaller gifts, with him signing a document to say he cannot enforce those smaller gifts. They said no. How is that riskier to the bank than a 90% mortgage? As above, this is not an affordability issue; indeed, they calculated the affordability on the basis that I would be paying these smaller "gifts" when they gave me the MIP.

There's a lot of generic talk on this thread about this being riskier for the bank, but as I said we addressed literally every single one of their concerns about risk and they still weren't happy. This is not a logical situation.

Gareth, not a customised product - an off the shelf product. It's no more effort than working out how any other applicant is funding their deposit. But your dissatisfaction with our outside-the-box thinking is noted, thank you.

AJ, the interpretation of the word "gift" was a major part of this. If I intend to give you something, but you have no way of enforcing it and indeed you have signed away any rights you might have to enforce it, is that a gift or a loan? I personally really struggled with this for a long time, and it's part of the reason we all agreed to tell the bank it was a loan and not a gift. But as it became clear that "gift" didn't necessarily mean "absolutely never going to be repaid in any circumstances", I became more comfortable agreeing to calling it a gift provided the bank understood that my intention was to pay it back. It's moot anyway as they have rejected this. Turns out they are now doing their best to give me a 95% mortgage but I've told them to stick it where the sun don't shine. I don't want a long term relationship with a bank which starts it off by misleading me for weeks and potentially prejudicing my purchase.

But yes, the lesson I have learned from this is that banks have to follow processes, and it doesn't matter whether or not those processes make sense or even prejudice the bank - rules are rules and people aren't allowed to even think about a slight variation of one of those rules. And as I said, I have let it go - I'm going with another bank. Just responding to the comments on here so people don't start with the mean comments about how I never returned to the thread

Thanks ACG, my own feelings about the risk levels one way or the other aside, what has really gotten to me is the failure by the bank to pick this up at any point in the last 3 weeks when we were honest with them from day 0 (by which I mean even before we applied for the MIP and we were assured that our proposal was acceptable) - particularly if the criteria are so strict that they should have known from day 0, or day 1 or any day after that. That way I could have proceeded with this bank at 95% no problem.

New mortgage application going in with literally any other bank for a 95% mortgage tomorrow