Mortgage refused

payless

Are you actually putting down a deposit ( or as much as the lender would normally require for this product) - or is the deposit calculated on the diff between value and purchase price... some lenders will only allow the latter situation if its a family purchase.

Of course FTB can buy from any route- just they need a deposit -

my guess is the application was based on the equity being classed as a large deposit - whereas the actual deposit is much lower or nil.

catherinemick

The house value is £225000 and we are able to buy it for £100000.

As stated before my father in law declared himself bankrupt a number of years ago and friends of his bought over the house for £40000 so he and the family would not lose their home.

After he died we had to go to court with regard to the will and the friends have agreed to allow us to buy the house from them for £100000. this is my husbands family home and is now home to us and our 2 children so it means a lot to us to keep the house.

Because the house is worth a lot more than we are borrowing we did not have to raise a deposit,

We applied for an intrest only mortgage and was all approved until the solicitor went to collect the money and was told they were withdrawing the offer

dunstonh

basically we are first time buyers, do all first time buyers have to buy from family members??

You are buying it under value and not paying a deposit. So, the lenders needed to know why and you must have told them that you were buying it from a family member and they were happy to agree that on those terms.

Normal first time buyers have deposits and dont buy under valued properties.

The solicitor has obviously found out its not a family member and informed the lender. The lender has decided to withdraw the offer either because you didnt tell them the correct status or some reason linked to that.

It is possible the lender will reverse that situation when you tell them the correct story. At the moment they think you lied on the application.

catherinemick

Thanks

We will contact them today and hopefully we can set them straignt that they are not family members and hopefully they will change their mind.

We did not lie on the application form wires have been crossed somewhere.

fingers crossed they are a reasonable bunch and let us keep our home!!

payless

In underwriting terms the bit about FIL etc is all a side issue - basically you are buying your current tenanted property at below value and not putting down a deposit - some lenders will allow this situation, sounds like the IFA placed it as such but was not aware that the lender used had other conditions ( ie only from family member)

Conrad

Fault here is with the broker - yet another example of sloppyness. He should have known lenders do not like selling under value to non blood relatives.

Find a new broker but make sure they are very experienced and do all the ground work up front. It can be done.

catherinemick

I agree the fault is with the broker he knew all along we were not buying from a family member but allowed us to process the whole mortgage.

No luck with lender they have stated it is not their policy so have left us hanging high and dry, back to the drawing board.

Thanks everyone for their help and advice

Mrs_Bumble

That is a shame.

Who is the lender?

What is the broker going to do for you now?

catherinemick

the lender was Britannia Building Society, don't know what to do bout the broker don't thinks he realises our situation and how much we want this house, maybe shop around and get another one

Mrs_Bumble

Who spoke to Britannia, you or the broker?

Let me get this straight, you have been living in the property for years, was that rent free? Or was your father in law's friend charging you rent?
You are buying the property at £100,000 against a confirmed value of £225,000?
I assume affordability is fine and no credit history problems at all?