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  • FIRST POST
    • splurgegun
    • By splurgegun 12th Oct 17, 9:54 PM
    • 16Posts
    • 62Thanks
    splurgegun
    held prisoners in our home by the Co-op, fuming! advice sought
    • #1
    • 12th Oct 17, 9:54 PM
    held prisoners in our home by the Co-op, fuming! advice sought 12th Oct 17 at 9:54 PM
    We accepted an offer on our house of £190k on Thurs 21st Sept.
    We intend to take £63k equity with us.
    Spoke to my current lender, the Co-operative, got an agreement in principle of £184k.
    We viewed 7 houses over that weekend with asking prices up to £240k so as not to stretch ourselves.
    On Monday 25th Sept we made an offer of £225k on our fave house which was accepted, all good so far!
    So we only needed a mortgage of £162k. Shouldn't be a problem!
    Now, after six telephone conversations with the Co-op totaling around 4 hours, I get a call today saying the underwriters say we can only borrow £152k and will that be a problem for us?
    Well, duh, actually yes, that will be a problem for us as it leaves us with a £10k shortfall.
    So now I have to find another lender, 3 weeks into the process.
    Unfortunately I'm on a 5 yr fix with a 5% early redemption penalty (which is around £6k)
    Is there any way I can wriggle out of the ERP ? would a letter to head office appealing to their human nature be of any use?

    thanks in advance

    SG
Page 1
    • zx81
    • By zx81 12th Oct 17, 9:56 PM
    • 14,380 Posts
    • 15,170 Thanks
    zx81
    • #2
    • 12th Oct 17, 9:56 PM
    • #2
    • 12th Oct 17, 9:56 PM
    No. .
    • Kidder81
    • By Kidder81 12th Oct 17, 10:02 PM
    • 63 Posts
    • 65 Thanks
    Kidder81
    • #3
    • 12th Oct 17, 10:02 PM
    • #3
    • 12th Oct 17, 10:02 PM
    Guess it's either take the hit on the early redemption, renegotiate house price or find a cheaper house.
    • glosoli
    • By glosoli 12th Oct 17, 10:12 PM
    • 675 Posts
    • 388 Thanks
    glosoli
    • #4
    • 12th Oct 17, 10:12 PM
    • #4
    • 12th Oct 17, 10:12 PM
    One of the risks involved with being in a fixed rate with early repayment charges and having to move house, there are never any guarantees.
    • BoGoF
    • By BoGoF 13th Oct 17, 6:23 AM
    • 2,722 Posts
    • 1,960 Thanks
    BoGoF
    • #5
    • 13th Oct 17, 6:23 AM
    • #5
    • 13th Oct 17, 6:23 AM
    Seriously over dramatic heading btw.
    • csgohan4
    • By csgohan4 13th Oct 17, 6:32 AM
    • 4,015 Posts
    • 2,497 Thanks
    csgohan4
    • #6
    • 13th Oct 17, 6:32 AM
    • #6
    • 13th Oct 17, 6:32 AM
    your not held prisoners, you chose to have a 5 year fix and you chose to move within those 5 years? Who's choice was that? It isn't the lender's fault you don't earn enough or the house is over priced.


    A letter will do no good, you signed the mortgage conditions and it is contractually binding.
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • splurgegun
    • By splurgegun 13th Oct 17, 6:58 AM
    • 16 Posts
    • 62 Thanks
    splurgegun
    • #7
    • 13th Oct 17, 6:58 AM
    • #7
    • 13th Oct 17, 6:58 AM
    Hi, OP here,

    My main gripe is that we waited for an offer, then got an agreement in principle, determined our budget then went out and viewed houses in our price range

    Now, 3 weeks in, the actual mortgage offer (pending the valuation) is 32k short of the agreement in principle and £10k short of what we need. So we've wasted everyone's time

    I was totally honest with the Co-operative at every stage. What was the point in the agreement in principle?
    • haras_nosirrah
    • By haras_nosirrah 13th Oct 17, 7:12 AM
    • 1,322 Posts
    • 2,468 Thanks
    haras_nosirrah
    • #8
    • 13th Oct 17, 7:12 AM
    • #8
    • 13th Oct 17, 7:12 AM
    did they have the paperwork e.g. payslips in front of them when doing the agreement in principle

    there must have been something not declared or that has come to light to make them drop the offer e.g.

    additional undeclared commitments in the background
    deductions on payslips e.g. travel loan
    childcare commitments

    they don't just decide to do it on a whim - what reason have they given you

    have you asked why it has been dropped. If it is due to a commitment could that commitment be cleared, if it is due to a payslip deduction is it something that is due to finish or could the mortgage term be extended to bring it back within affordability
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • haras_nosirrah
    • By haras_nosirrah 13th Oct 17, 7:14 AM
    • 1,322 Posts
    • 2,468 Thanks
    haras_nosirrah
    • #9
    • 13th Oct 17, 7:14 AM
    • #9
    • 13th Oct 17, 7:14 AM
    I now get all payslips and bank statements before doing an agreement in principle. We didn't used to and the agreement in principles weren't worth the paper they were written on. Most memorable was someone who said they earned 35k a year. Got the payslips for full application and it was more like 20k a year. She said that it would be £35k if she worked full time which was lovely but she worked 20 hours a week so nothing like full time - why declare the full time salary she didn't actually earn?
    Last edited by haras_nosirrah; 13-10-2017 at 7:37 AM.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • kingstreet
    • By kingstreet 13th Oct 17, 7:22 AM
    • 32,366 Posts
    • 17,376 Thanks
    kingstreet
    Had one this week.

    When the bank statements arrived there was £371 a month in car finance payments.

    When challenged, "ah, did we forget the car payments...?" as if it's just a minor thing. It knocked £30k off what they could borrow and we had £0 headroom between what they could borrow and what they needed to start with...
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • haras_nosirrah
    • By haras_nosirrah 13th Oct 17, 7:28 AM
    • 1,322 Posts
    • 2,468 Thanks
    haras_nosirrah
    once had someone come in. Asked if there were any credit issues and told no. Spent an hour and a half doing a full fact find and discussion - aip declined. Asked client to check credit report and he said 'I was discharged from bankruptcy last year - could that be it'. Funnily enough it was
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Mortgage_Adviser
    • By Mortgage_Adviser 13th Oct 17, 10:21 AM
    • 45 Posts
    • 22 Thanks
    Mortgage_Adviser
    The OP's sitiation is exactly why I would never fix my own mortgage for longer than 3 years.
    The OP might had no intension whatsoever to move when taking out the fix but 5 years is a way too long period to predict what the future holds for you.
    • ACG
    • By ACG 13th Oct 17, 11:07 AM
    • 15,893 Posts
    • 8,141 Thanks
    ACG
    I just pictured a man from the co-op with a gun at the end of the garden.

    What is different between the DIP and the application? Something must be as there would not be a £32k difference.

    I occasionally get a no from an underwriter. Once you pick up the phone to them and discuss the case etc, it is very rare that we end up with a difference between a DIP and an offer. Going direct obviously means you can not speak to an underwriter so it becomes a bit of a long winded chain.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • splurgegun
    • By splurgegun 13th Oct 17, 1:11 PM
    • 16 Posts
    • 62 Thanks
    splurgegun
    Hi, OP here again,

    during the DIP process, I said that I had a balance of £5.8K on a long term 0% credit card (until 2020)

    In order to increase my affordability, I settled the balance, right there and then, with one hand, while holding the phone talking to the Co-op guy with the other hand. I told him i was doing this and we went ahead with the DIP based on me having a normal spend of around £1k monthly on my Co-op Visa card which is settled in full every month

    A week or so later, during the application process, we talk about how the £5.8K balance will likely show up as outstanding because the credit check lags a bit, but no problem, if the underwriter needs proof I can show it has been settled.

    The "feeling" of the underwriter is that this previous £5.8k balance is more than likely to recur, and that over time my credit card balance is likely to swell
    • ACG
    • By ACG 13th Oct 17, 1:34 PM
    • 15,893 Posts
    • 8,141 Thanks
    ACG
    So you would have actually been better keeping the £5k balance and putting it towards the deposit...

    Co-op and one or 2 other lenders do have a similar outlook on this sort of thing.

    Have you thought about throwing in an appeal. Write a letter to the underwriters explaining how you come about having the debt, how you are happy to be in a position to clear it and that you have no intentions of running it up again (assuming you dont).

    This is the sort of thing I would do with client to try and get the decision reversed. Have you also looked at extending the term?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • haras_nosirrah
    • By haras_nosirrah 13th Oct 17, 5:56 PM
    • 1,322 Posts
    • 2,468 Thanks
    haras_nosirrah
    to be fair to the coop we get a lot of clients who clear their credit cards with a remortgage - two years later they come back and the credit cards are back and quite often higher than two years previously
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Thrugelmir
    • By Thrugelmir 13th Oct 17, 6:06 PM
    • 56,202 Posts
    • 49,582 Thanks
    Thrugelmir
    The "feeling" of the underwriter is that this previous £5.8k balance is more than likely to recur, and that over time my credit card balance is likely to swell
    Originally posted by splurgegun
    Won't be a feeling. Lenders can run an algorithm over the data held on your credit file. From this they'll have a good idea how well manage your money.

    I doubt that this is the reason though. The Co-Op bank's financial position is well publicised. Might be that simply didn't want your custom at the current time. With a broad board level decision to reduce exposure to certain market segments.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • Fiesto88
    • By Fiesto88 13th Oct 17, 8:05 PM
    • 112 Posts
    • 75 Thanks
    Fiesto88
    I can’t speak for how they are now, but I used to work for co-operative bank until 2014.

    When I was there, the DIP was extremely high level and cursory. It was basically, how much do you earn? Multiply by the maximum salary multiple and a soft credit search to check for any major issues.

    Quite often, a full application would offer less than the DIP due to stated outgoings exceeding the projected amounts used for the DIP.

    Could it be that? As I say, they may have changed to the full DIP model that most lenders use now where the majority of the application data is captured upfront.
    • kingstreet
    • By kingstreet 13th Oct 17, 8:32 PM
    • 32,366 Posts
    • 17,376 Thanks
    kingstreet
    If you are 'stoozing' (Mr Lewis' expression for carrying a 0% card balance while you have an equal amount in savings earning you interest) there should be no way a lender 'taxes' your mortgage affordability with that, especially if you are able to demonstrate repayment of that balance at a moment's notice without recourse to your deposit funds or further borrowing.

    Any lender who did that to one of our clients would be getting a rocket!
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • robatwork
    • By robatwork 13th Oct 17, 8:52 PM
    • 4,008 Posts
    • 4,352 Thanks
    robatwork
    Am heading for the Co-op HQ now with pitchfork and flaming torch to try to free you!
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