Halifax Mortgage Promise

MarieC5575

Hi Everyone

I just wondered if anyone could shed any light on what the benefit of getting a mortgage promise from the Halifax. We recently applied for a mortgage from HBOS and were issued with a mortgage promise which was subject to proof of income and the information we had supplied being correct. We were advised to find a property, put an offer in, have it surveyed etc. After doing all this and selling my own house (due to conclude really soon) we have found that our mortgage application isn't guaranteed and will have to be assessed by a processor before underwriting and that we won't necessarily get the mortgage. This has left us really stressed and worried. After speaking to HBOS call centres on several occasions and getting nowhere, I went into my local branch where a very nice mortgage advisor explained to me that our application passed the credit score as a C and this means that it is subject to a business file being put forward to underwriters.

Therefore my questions are: what is the point in the Halifax issuing mortgage promises when they aren't actually promising anything and why can't they issue the promise (in the case of C passes) with an advisory note stating that your application is subject to a successful business case being put forward. If I hadn't approached my local branch for more information, I would have been none the wiser. Can anyone help????

_Andy_

Any mortgage in principle/mortgage certificate, etc., works on the same basis. The idea is that they've done a credit search, done credit scoring - and based on this, and your stated income, etc.. and also a satisfactory property and valuation, they'd be OK to lend.
They're not going to say definetely yes at this stage as no proof of income has been supplied, no property has been found etc.

MarieC5575

Thanks for your reply. I completely understand your point but as I said in my first post, we have already had an offer accepted on a property and the survey etc has been carried out, so it is not just a case of them agreeing the mortgage once this information has been supplied to them. After telling us in the mortgage promise that we had £xxxxx available to us and that it was subject to information being supplied being correct, I have found out that it is not that straightforward and a case for us has to be put forward by a processor. I just wondered if anyone had been through the same process with the Halifax (C pass application) and if so what the liklihood of a successful outcome was?

Ian_Griffiths_Halifax

So long as the information you gave them to get the Mortgage Promise is correct and you can prove it, then you should be ok.

Andy summed it up well. Every Mortgage Promise from every lender is pretty much the same in that they are subject to proving what you've said is true. If that weren't the case and they simply 'Fully' approved a case based on information given for a Mortgage Promise, you could have told them you were earning £50,000 when if fact you were earning £20,000 and so that £180,000 mortgage would have been affordable but £20,000 makes a big difference.

MarieC5575

Thanks Ian for replying, however I don't think I'm explaining myself properly. I fully understand that without proof of income etc, I could say I earn £1 million so I know they have to check these documents and that is fine. What I don't understand is them telling us to go and find a property, offer, survey etc and then saying that although I have passed the credit score with a C and even if I have submitted the correct documents which verify all the information, they still cannot guarantee that the mortgage will be approved because they need to build a case for me. This involves all sorts of checks including your bank accounts which is what I am worried about. Apart from having an overdraft (I can pay off if required) which they will probably have a problem with even though they don't ask if you have one during the initial application, they check the conduct of your account i.e. your expenditure etc. The whole reason we are moving is to reduce our mortgage loan and therfore our expenditure in an effort to get on better financial footing.

Ian_Griffiths_Halifax

You've had a survey done before submitting a full application? Do you live in Scotland?

MarieC5575

Hi Ian

Yes, I live in Scotland. I contacted the Halifax after we had found the house and had our offer accepted. The Halifax asked me to get the survey done asap, which we did.

Ian_Griffiths_Halifax

Have you submitted a full application yet? If not, you won't know if you've got it until you do. It's just unfortunate about the survey fee you've paid as that's lost money now, but hopefully you'll be ok for the mortgage. It should be fine so long as you can show the incomes you've stated.

If they ask you to provide bank statements and you are concerned about the appearance of them, then also provide statements of your savings, even if they don't ask for them. That way you are 'building your case'.

MarieC5575

We have submitted the application and the documents were sent on Friday by recorded delivery. I spoke to someone this morning who said that they aren't on the screen yet (I understand that this can take a couple of days). The guy I spoke to also said that it could be the start of next week before I get a decision. I'm not really worried about the money paid for the survey, it's all the upset and worry this has caused. Although we were struggling to get by, we were getting by. When we originally applied for the mortgage, we didn't really think we'd get it (due to our high expenditure, loans etc) so when we got the mortgage promise we were so relieved as it seemed to be the answer to our money worries. At no point after the mortgage promise was issued or when I went back to the Halifax with the property details etc were we advised that the application was still subject to all these checks. I was only told that the credit score was fine and that I would have to send these documents in for verification purposes. It was only through asking someone in my local branch that I found out the position we are in or I'd still be thinking everything was ok. The people buying our house are wanting to conclude asap as they are going to Australia for six weeks and if we put them off they may well pull out altogether. I just feel that if it was explained properly after the initial application (mortgage promise) we may have reconsidered starting the whole process. Sorry for going on but I am really worried about this.

Ian_Griffiths_Halifax

What's the worst case scenario? Sell the house, bank the equity and rent? Would your new rent payments be lower than your proposed mortgage payments? You have a buyer, don't lose them.

You are in a good position to buy if you have equity/cash in the bank, but things are out of your hands just now and there's nothing you can do about it as it's in the Halifax's pipeline. Sit back and wait, but let your sale carry on.

MarieC5575

That's what we plan to do. I think it's the best option for us at the moment. I'm just so angry that we will have shelled out money for legal fees and surveys because we thought that everything was ok. Not only this, I'll have to go back and tell the vendor he'll have to put the house on the market again (he's already had two people pull out because they couldn't get a mortgage). You're right, there's nothing we can do about it for the moment, we'll just have to wait and see (patience isn't one of my strong points!). Thanks so much for your advice though - I really appreciate you taking the time to respond.