Mortgage withdrawn on day of completion...

koexelek

stevetodd wrote: »

Sorry to hear of this story. Is it standard practice for a lender to carry out a further credit check just before releasing the mortgage funds?

Not all lenders do it, but quite a few do.

Two things they are probably looking for..

1) no adverse credit has susequently appeared
2) the borrower has not taken on any further borrowing since the mortgage offer was issued ( making the payments, in the lenders' eyes, now unaffordable.

mrs_deadline

Hold on, in the turmoil of selling, buying and moving house it can't be that unusual to go briefly overdrawn or even (shock horror) miss a credit card payment?!? For my money, it's a completely disproportionate reaction and I really hope you get somewhere with your complaint.

silvercar

Hugbubble wrote: »

I don't understand how the OP had the funds to pay the vendor's 10% deposit which is payable on exchange if they didn't have the mortgage funds already in place?

If the mortgage was 95% LTV then where did the other 5% come from?

People often only pay 5% deposit on exchange, with an agreement to make it up to the 10% if everything goes belly up.

Hugbubble

Ian_Griffiths_Halifax wrote: »

They only needed 5% for the original mortgage and now they need 10%. Father is stumping up the 5% difference and acting as guarantor.

Yeah I get that. But normal standard practice is to pay 10% to the vendor on day of exchange, no? I guess they came to an agreement to pay a lower %age deposit on exchange.

koexelek

mrs_deadline wrote: »

Hold on, in the turmoil of selling, buying and moving house it can't be that unusual to go briefly overdrawn or even (shock horror) miss a credit card payment?!? For my money, it's a completely disproportionate reaction and I really hope you get somewhere with your complaint.

Problem is though, lenders are often looking for the slighest excuse not to lend these days.

I had a client declined by The One Account recently, who had gone over her overdraft limit ( nothing bounced) for 4 days during a 6 month period.

LucyJT_2

silvercar wrote: »

People often only pay 5% deposit on exchange, with an agreement to make it up to the 10% if everything goes belly up.

This is exactly it.

My solicitor had our 5% which came from the deposit from the buyer of my flat. If we don't manage to complete within the time they can try to get the other 5% to make a total of 10%.

LucyJT_2

bing0 wrote: »

Look at the facts on their side:

£3600 clear funds each month

£1100 mortgage pament

£500 credit commitments....okay. So you now have £2000 left per month.

Lets say for the sake of it you need £1000 to cover food,bills,petrol.

That STILL leaves you £1000.

So there's £1000 spare after everything and one of you go £30 overdrawn.

I know its not alot,but it doesn't say you are jointly a safe bet,does it.

Put it like this,if it was your money you were borrowing to someone would you choose a couple who stay in credit OR would you choose the couple that go overdrawn (even once) ?

.:o

I am not necessarily disgreeing with their decision, I am just disagreeing with when they made it! They had 9 months between when we got our AIP and when we completed (we had until October to complete on the original offer). They checked us out in April and again at the beginning of August, no problems. I would have understood if they had seen fit to withdraw their offers then. I just don't think it should be allowed that can withdraw their offers so close to completion and after contacts have been signed and exchanged.

Yes ok perhaps we shouldn't have gone overdrawn, but it was an expensive month with 2 family weddings and a holiday. My husband was in the middle of Salisbury Plain with the Army Cadets the week it happened and I guess in a normal situation we keep track of our accounts online and transfer money between our accounts and our savings. We were unlucky that it happened that month I guess. Like I say I can see how they might see us as a risk, but they had plenty of time to decide this before the day of completion.

LucyJT_2

Just wanted to say thank you to all the people who have taken the time to reply to this thread. As you can see I am new to these forums, and I am also new to this website. Someone recommended I come over here to discuss the situation and I am grateful to those of you who have given your thoughts and advice.

Frozenace

Personally I think that 5% deposit is a bit on the low side. If you have a joint 61k, live with your parents and in 9 months are still the same as before the offer went through, then there's possibly something wrong...

that lender is pretty bad though for pulling out, maybe they were going bust anyway.

Good luck though!

Sonofa

Frozenace wrote: »

Personally I think that 5% deposit is a bit on the low side. If you have a joint 61k, live with your parents and in 9 months are still the same as before the offer went through, then there's possibly something wrong...

that lender is pretty bad though for pulling out, maybe they were going bust anyway.

Good luck though!

I think you've misunderstood, the OP, at least in my understanding, hasn't been living with parents for nine months. She had to complete on her sale and move out after the mortgage offer was withdrawn earlier this month.