banks backing out at last minute

listerofsmeg_2

Are they allowed to do this?

TWICE now we've had a mortgage agreed in principle and then rejected at the last minute. First time it happened with Abbey National. They agreed it. We put in an offer and had it accepted. They then turned around at the last minute and said that they would give us a mortgage but at a higher interest rate (1% higher!).

So we said no and went to Nationwide.

Nationwide agreed us, took our money for a survey. Did the survey. Everything was ok.... then they rejected us for no real reason (we passed the credit rating). They just changed their minds AFTER they'd taken our money for the survey.

The vendor is now understandably getting impatient with us (we're first time buyers and said things should move quickly because no chain).

A friend of ours who's an estate agent says this is happening a lot at the moment.

CAN BANKS DO THIS?????? they go on about ethics of lending (abbey said our low rate mortgage was unethical, that's why they wouldn't give it to us) but I think it's completely UNETHICAL to mess people around like this.

jonesMUFCforever

Until both sides sign on the dotted line then yes any offer can be withdrawn.
I take it the first withdrawal of a mortgage offer was because they pulled a particular product - I think you should have gone with the higher offer.

Just like you can change your mind about buying any house or not.

UK007BullDog

What are your finances?
Are you very much border line?
How much savings have you got?
What is the mortgage amount?
How much do you earn before tax?
Any other debts?

mircea

listerofsmeg wrote: »

Are they allowed to do this?
CAN BANKS DO THIS?????? they go on about ethics of lending (abbey said our low rate mortgage was unethical, that's why they wouldn't give it to us) but I think it's completely UNETHICAL to mess people around like this.

Totally understand your frustration but the answer is yes, they can. Any other business who would try this on, they would get squashed by consumer power. The banks have one thing that can buy you everything in this country: money. And because of the financial power they hold, nobody can touch them. Just look at the mess with regards to overdraft charges, turns out they were charging about 8 times more then they should have, raking in billions of undeserved profit, paying their directors millions in bonuses, yet nobody can do anything, not even the British justice system.
We went through a similar situation with Halifax, were delayed for four months, they kept coming back with really childish questions and in the end they said they will give us the mortgage but only after we pay something like 12k to repay the car loan and another loan. The practice seems abusive to me, they knew about the car loan from the start so why not just reject us from the beginning rather then let it drag on and on. I am writing to the FSA but like I said before, the banks have money. I don't think anything will be done.

listerofsmeg_2

What are your finances? : pretty good. No debt - we've paid it all off.
Are you very much border line?: credit rating C. Not that great, but still a pass.
How much savings have you got?: 23000 deposit (house is 175000) no other savings.
What is the mortgage amount? ^
How much do you earn before tax? My partner earns 38500. I am a full time mum so I don't earn anything except child tax credit and child benefit.
Any other debts? - We've paid it all off in the last month. About £10500 but it's gone now. It was a loan and a couple of credit cards.

I take it the first withdrawal of a mortgage offer was because they pulled a particular product

No, we'd been clever. Or rather our mortgage broker had been clever. He'd split the mortgage into three separate mortgages in order to get a low interest rate. He spent ages checking it was all ok, before he did it. They turned around at the last minute saying it was unethical.

jonesMUFCforever

Then I take it you are now looking for a new broker?
Looks like the last one has wasted your time (and money) and at the end of the day was looking after his own commission.

listerofsmeg_2

No, we like our broker. He tried his best. He's been working very hard for us, let's us call late in the evening, and we like him. I really do think the bank is in the wrong not our broker. He spent a long time checking the 3Xsplit was alright with Abbey and they said YES. Nationwide was the same. We're angry with banks, not our broker.

jonesMUFCforever

Well 2 out of 2 failures to get you a mortgage - he is certainly consistent.

minimike2

Have you obtained a copy of your credit file to make sure there is no CIFAS information etc?

agent_orange_2

This may be of no consolation, especially if you've found your dream home but all indicators are pointing to further downward pressure on house prices. Maybe, if you hold fire you will not need to obtain such a large mortgage.

Best of luck