Mortgage okayed in principle-what's the chance it will be declined at this stage?

lea

Hi

Hope you can offer some advice, this is a bit complicated!

We are in the very fortunate position that my partner and I are having an £80k deposit put down on a house from one of his relatives, through a trust fund. This fund will also make overpayments on our mortgage of 10% each year for the first 3 years. The trust fund is also paying off £20k of debt we have, and we will pay that back at a later date when we are more financially secure.
The family member who has set up this trust fund will also act as guarantor on our mortgage.

We have made an offer of £182k on a house we want, and a mortgage has been agreed in principle of up to £120k by a company called Skipton's. According to our financial advisor, this is the only company that would offer us a mortgage due to the complicated way the money is in the trust fund, and the overpayments the trust wants to make.

I am a born worrier, and I can't stop thinking that due to our debt problems in the past, this mortgage may be declined. My partner, about 4 or 5 years ago when he was 18 or 19, was late in making a few credit card payments. We have no CCJ's but am worried that if this mortgage company now refuse a mortgage, we have no other company we can approach.

Do you think its likely, from the information I have given above, that they would turn around and decline after agreeing it in principle??

We won't know for around 5-7 days and I can't stop worrying!!

Sorry this is long winded

Lea

kissanpoika

I'm sure other people here are better qualified to answer exactly the question but I don't think a few late payments 4 or 5 years ago will mean they turn you down. It's not great but as long as everything else is in order I'm sure they will see past it, especially considering the size of the deposit you have even if it is coming from an unusual source.

mgw99

When I had my mortgage agreed in principle a couple of months ago they carried out credit checks on me and my boyfriend, so I would think any adverse credit history would have been picked up then.

as400

Aren't credit checks made prior to the 'principal' stage?...they ask for your address details prior to agreeing in principal for this very reason....I think post principal stage the checks are with employment...are there any underwriters on this board??!!

divadee

I will move this over to the mortgage board as there are a lot more people on there specialised in the mortgage area

dunstonh

a mortgage, in principle, doesnt really mean anything. Some lenders use it as marketing gimmick. ie. "decision in a minute".

What it is saying that based on what you have disclosed so far, if no further information comes to light, there is no reason to see why they would not lend the money to you. You would be surprised how much can come to light after a credit check.

However, an experienced independent mortgage broker would know who to use and what is and is not likely to be agreed. They will also often check with the lenders to see how they feel about it so no time is wasted in sticking in applications which are going to get rejected.