RBS - dangerous advice to Scottish mortgage applicants

lindymac

If you are buying a house in Scotland and call RBS to apply for a mortgage, take care, as not all their advisers are clued up on Scottish house buying procedures. Two different advisers told my husband and I to go away, make a formal offer and have it accepted, THEN come back and apply for a mortgage. Under Scottish law, once you have had an offer accepted you are bound to buy the house - it is an unbreakable contract, so if you do this and they refuse you a mortgage you are in serious trouble. We had to call three times before we got an adviser who had the correct information to hand for Scottish applicants - ie get a formal mortgage offer, THEN make your offer to the vendor. Luckily we knew to query the first two, but a very poor performance for what used to be a flagship Scottish bank.

beecher2

You only have a mortgage promise until after your offer is accepted - not a formal mortgage offer. You put your offer in, and apply for a formal mortgage once you've had your survey done. Only when you sign the missives is your offer binding. Isn't your solicitor talking you through the process?

beecher2

Have a read of RBS's factsheet as it explains the process better than I have

http://www.rbs.co.uk/personal/mortgages/g5/buying-and-selling/how-to-buy-a-home.ashx

Buying a home in Scotland
Choose an area
Pick an area where you think you'd like to live.
Price - decide what you can afford
Make an appointment with one of our Mortgage Advisers. They'll discuss which mortgage and repayment method will suit you best.
They can also give you an agreement in principle, which could put you in a stronger position when you come to buy.
Visit an estate agent
Once you know your budget, it's time to visit estate agents to find your dream home.
Find a solicitor
It's better to do this before you make an offer. That's because you'll need to act quickly when you find your dream home.
Ask your solicitor to 'note interest'
Once you've chosen your place, it's time to contact your solicitor. Your solicitor will, in turn, contact the seller's solicitor and 'note interest' in the property.
Get a surveyor's report and complete your mortgage application
Before your mortgage provider will give you the money, they will need a surveyor's valuation. Have a look at the report, then forward it to your mortgage lender.
Make an offer to the seller
Your solicitor can make a formal offer. Your offer should also include a 'date of entry'. This is the day and month on which you pay for the property and receive the keys.
Is there anything you'd like the seller to leave?
Give your solicitor details of any extras to be included, like carpets and curtains.
Closing date
If several people note interest, the selling solicitor may set a deadline, known as the closing date. This is when all offers must be received.
The seller will then decide which offer to accept. If the seller accepts your offer, both solicitors can start making the final arrangements.
Solicitor concludes missives
When the written negotiations (known as missives) have been completed, your solicitor will arrange for further checks on the property, including a Local Authority search. Missives all done, you're now legally responsible for the property.
Arrange buildings cover and life assurance
Be sure to arrange the cover before the property is yours.
Settlement
That's it. You pay the deposit to your solicitor (if this applies to you). Your mortgage lender sends the remaining funds to your solicitor. Then your solicitor will transfer the funds to the seller's solicitor.
Your solicitor will also bring along a document called a Disposition. This legally transfers the property to your name. That's the settlement process done.
Move in
Congratulations! Now its time to make the place your own.

VIGILANT22

QUOTE=lindymac;discussion/2364053]If you are buying a house in Scotland and call RBS to apply for a mortgage, take care, as not all their advisers are clued up on Scottish house buying procedures. Two different advisers told my husband and I to go away, make a formal offer and have it accepted, THEN come back and apply for a mortgage. Under Scottish law, once you have had an offer accepted you are bound to buy the house - it is an unbreakable contract, so if you do this and they refuse you a mortgage you are in serious trouble. We had to call three times before we got an adviser who had the correct information to hand for Scottish applicants - ie get a formal mortgage offer, THEN make your offer to the vendor. Luckily we knew to query the first two, but a very poor performance for what used to be a flagship Scottish bank.[/QUOTE]

Wrong, wrong wrong.........Acceptance of a formal offer is not an unbreakable contract..............

The contract in Scotland is known as the "missives"...and it is only once these are signed the agreement becomes contractual...........

At any time before the missives are concluded either side can pull out of the transaction without any financial penalty....