Mortage Application Advice Needed (Self Cert)

shopper150

I am in the process of remortaging a property with a self cert mortage. I needed to purchase the property quickly a few months ago, and a friend lent me cash to so that I could compelte quickly.

My mortgage application is now in process, and the lender is asking two questions:
1) When was the property purchased
2) Where did money used to purchase the property came from?

Will telling them that I borrwed it from a friend affect my application?
Does the fact that the property was purchased 6 months ago cause a problem?

herbiesjp

You should tell any mortgage company the true answers to the questions they ask.

AndrewSmith

The lenders ask these types of questions for a reason.

"When was the property Purchase" - There are a number of reasons for this eg: To ensure that you are outside any pre-emption clause usually associated with ex-council houses. Also it gives the lender an Idea on whether the valuation figure you state is going to be realistic, as they will also ask you for the original purchase price.

"Source of Deposit" - They are protecting their own interest here, and ensuring that the property purchase is going to be affordable. If you have borrowed the money from a loan company for example you have the loan repayments as well as your new mortgage to pay.

Don't forget that they have no obligation to lend money at all and can reject any application without having to explain why. The most common reason for applications being declined at the later stages of underwriting is where people have been less than honest with the information provided.

If you are completely honest with the lender you will end up with the most suitable mortgage for your circumstances. My advice is tell them the truth.

Andy

shopper150

Thanks for the replies. I have every intention of telling the absolute truth.

I just want to know whether borrowing money from a friend to complete the purchase quickly will have any effect on the chances of my getting the mortgage.

luckyfool

I think it would possibly depend on what type of arrangement this was. If it was a very short term loan while you liquidated savings or investments, and your friend has already been paid back then I think I would be comfortable declaring that your deposit funds came from investments (or wherever). If in fact you do still owe the money to the friend then you obviously must declare the source.