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Vendor has owned house less than six months
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# 1
Julfulbub
Old 02-11-2009, 7:19 PM
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Default Vendor has owned house less than six months

I am in the process of selling my house and buying another - for the second time this year. Apart from a lot of waiting around, this time the process has been relatively smooth.

However today I was informed that my mortgage offer has been withdrawn as my vendor has owned the property for less than six months??? Has anyond else heard of this or had any experience of it. My case is currently with my lenders Exception Department - I am waiting with bated breath.
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# 2
Milliewilly
Old 02-11-2009, 7:36 PM
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I don't see why how long the person has lived in the property should affect your mortgage offer but I am sure someone will be along in a minute with an answer. The mortgage will be issued on the basis of the valuation.

You say you are moving for the second time in the same year - has your old deal expired with the sale of your property or are you porting your existing mortgage?
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# 3
Julfulbub
Old 02-11-2009, 7:50 PM
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Sorry I haven't made myself very clear. I am not moving for the second time, I haven't moved at all yet. I sold my house earlier in the year and it all feel apart, I am now in the process of selling it again.

The strange thing is, the house I was buying previously came back on the market with a new vendor. The people we were buying from previously sold to an investor. The investor has agreed to sell to me but the asking price was more. This has all been approved by my lender, it has gone through valuation and I have had the mortgage offer through.

However my solicitor advised me that he is obliged to inform the lender that the vendor has owned the property for less than six months. I didn't forsee this causing any problems as I told the underwriter this myself when I was securing additional funds for the fact the asking price was more this time round.

Then today they sent a fax to my solicitor saying they are withdrawing the offer due to the vendor owning it for less than six months. I feel so down, this seems so silly, I would just like reassurance that this has happened to someone else and there is a way round it.
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# 4
Colliewobble
Old 02-11-2009, 7:52 PM
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Not that it's much help...but it could it be down to money laundering legislation?
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# 5
westv
Old 02-11-2009, 8:20 PM
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Quote:
Originally Posted by Julfulbub View Post
I am in the process of selling my house and buying another - for the second time this year. Apart from a lot of waiting around, this time the process has been relatively smooth.

However today I was informed that my mortgage offer has been withdrawn as my vendor has owned the property for less than six months??? Has anyond else heard of this or had any experience of it. My case is currently with my lenders Exception Department - I am waiting with bated breath.
If true, it sounds ridiculous to me.
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# 6
Doozergirl
Old 02-11-2009, 8:40 PM
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Is it a new build? It's not something I've hear dof before, the only thing I could think of if it's a very new build and still qualifies as that in a lender's eyes and therefore alters the lending criteria - many won't lend at less than 75% LTV?

I've sold a property before after owning less than six months and it's not been an issue :confused:
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# 7
westv
Old 02-11-2009, 8:42 PM
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Quote:
Originally Posted by Doozergirl View Post
I've sold a property before after owning less than six months and it's not been an issue :confused:
So have I (new build) but that was 11 years ago.
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# 8
Julfulbub
Old 02-11-2009, 8:48 PM
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No its not a new build. My solicitor said it is something that some lenders have started to implement and it is to do with fraud/money laundering. Having said that in his opinion he sees nothing untoward in my vendors acquisition of the property, it was just an investment opportunity.

Some people make a living out of buying houses and selling them on, there should be a way they can look at each case if they have concerns. I am just worried that my lender will say tomorrow that this is a rule with no room for manouvere. I can't find anything about it in the small print of my offer. I just feel my lender should have made me aware of this before getting me to pay out for a second valuation survey on the property and incurring more legal fees by pursuing this purchase.
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# 9
PasturesNew
Old 02-11-2009, 8:58 PM
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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.
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# 10
MiserlyMartin
Old 02-11-2009, 8:58 PM
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Are you sure its not due to the lender not lendig on it because the investors asking prices is too high ie overvalued?
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# 11
Julfulbub
Old 02-11-2009, 9:00 PM
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Quote:
Originally Posted by MiserlyMartin View Post
Are you sure its not due to the lender not lendig on it because the investors asking prices is too high ie overvalued?
Wouldn't have thought so as it went through valuation and they issued offer
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# 12
Julfulbub
Old 02-11-2009, 9:03 PM
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Quote:
Originally Posted by PasturesNew View Post
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.
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# 13
MiserlyMartin
Old 02-11-2009, 9:08 PM
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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.
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# 14
Milliewilly
Old 02-11-2009, 9:12 PM
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Quote:
Originally Posted by Julfulbub View Post
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?
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# 15
Julfulbub
Old 02-11-2009, 9:18 PM
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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.
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# 16
Comyface
Old 02-11-2009, 9:34 PM
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Quote:
Originally Posted by PasturesNew View Post
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?
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# 17
clutton
Old 02-11-2009, 10:17 PM
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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
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# 18
david29dpo
Old 03-11-2009, 7:00 AM
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Its the lenders. Money laundering plus any excuse not to give a loan.
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# 19
Richard Webster
Old 03-11-2009, 9:31 AM
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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 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 except to fee-paying clients.
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# 20
poppysarah
Old 03-11-2009, 9:56 AM
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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)
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