Mortgage Declined

beijing

Hi all,
my partner and I are looking to buy a house in one of the most desirable parts of South Manchester. We have a mortgage broker, and they have recommended Astra Mortgages. We have paid £100.00 arrangement fee for this. Yesterday, we had a call from the broker saying that Astra's surveyor was happy with the value of the house, but that it was in an area of low desirability ( Sorry the actual term was an "area of low demand"). As a result, they won't give us an 80% mortgage, but want us to increase our deposit to 25%.
We've asked the broker to contest this blatent nonsense, and they said that whilst they have never done so before, they will. They also said that we could speak to Astra themselves, but when we tried, we were told that we couldn't speak directly to the broker, and that the surveyor was UNlikely to alter their decision.

Does anyone understand how a house can be worth a price, yet in a less than desirable area? Surely, a proportion of the price is derived from it's location? If we were moving to a different part of Manchester, the same house could be got for a lot less because it is a less than desirable area.

Any advice gratefully recieved.

samay007

Hi Beijing, can you tell what is the interest rate for 80% LTV from Astra mortgages? did you try any other independent financial adviser. if you have 20% deposit and good credit history you can get great deals directly from high street banks. is there any problem with your credit file?

maninthestreet

Have you checked www.houseprices.co.uk to see what similar houses in the same area have sold for recently?

beijing

samay007- Rate is 4.65%. we've tried many advisors, and have 4 checking deals for us. Our advisor for this is one of the largest in the UK. We've an excellent credit rating. Banks offer higher than we've been offered, but we have tried. No problem with credit file.
maninthestreet- Yes, we've seen many properties around here, and this one definately isn't overpriced, nor is it underpriced. upmystrret tells us so, among others. I just don't get how a house can be of a value, yet not because of where it is. I wonder whether Astra advertis there rate, then get cold feet and make an excuse?

beijing

PS. We've had our own survey done!

RobertoMoir

beijing wrote: »

maninthestreet- Yes, we've seen many properties around here, and this one definately isn't overpriced, nor is it underpriced. upmystrret tells us so, among others. I just don't get how a house can be of a value, yet not because of where it is.

That does sound odd. I can see why the location might be considered in valuing a house, but thats the overall value they give it, not some "ah but..." thing. This just sounds weird.

beijing wrote: »

I wonder whether Astra advertis there rate, then get cold feet and make an excuse?

Somehow I doubt that. I'm fairly sure businesses make more money by trading than they do by not trading.

beijing

I've just read a Guardian article linked from another post in this forum, and it says that 7 building societies are being more cautious due to their credit rating changing. One of these is Norwich and Peterborough, of which Astra is a part. Would that explain it?

RobertoMoir

I think someone else mentioned this in connection with another B.S. in a different thread.

That might indeed explain things - they might not be willing to take on anything except the very lowest of risks right now.

beijing

Good news, we appealed, and the decision has been overturned. We should now get our mortgage. Thanks to L&C.

beijing

Oh, well done you's!

Conrad

Classic case of a broker recommending a lender based on price, without taking full account of other factors, such as service outcomes. I rarely use this lender as they go out of thier way to decline cases.