Is this a very bad sign?

Senior_Paper_Monitor

I have to ask this (pure nosiness): since your estate agents' 'independent broker' was advising the buyer, why did they suggest the swap - or possibly did they make the application with RBS because the buyer already had a direct deal with Halifax on which, obviously, they would not be paid.

You may never know of course (and I admit to being rabidly suspicious about EA brokers), but with Natwest we certainly have no problem holding back valuation until we have an underwriter level response (processed one on that basis last week), the EA broker may have acted totally properly, but equally may have done neither you nor the buyer a favour in a scrabble for a cut of the pie.

You may of course call me 'bitter and twisted'!

michael1234

Thanks Paper Monitor. Neither nosy nor bitter and twisted, I think (and I'm guessing too) that you might well be right.

I could throttle my EA.

I wonder how typical broker comission compare to EA sale fees....

Senior_Paper_Monitor

Minimal - assume EA receives a minimum of 1% on sale price - the mortgage broker will get (standard) 0.35% (which may well be split with his network - in our case we get .32% after network deduction on a standard case) on the mortgage part.

None of this is secret as it is declared on the KFI document and offer (as per FSA regs).

So sell a £200,000 property with a £150,000 mortage (75% LTV):

Estate agent's sales commission = £2,000 (minimum, very few deals below that)

Mortgage commission at broker level = £480 (that's why we charge fees !!) and that might be split 30% to EA = £144 (a pure guess, as we don't do this sort of deal) - obviously all parties then hoping to sell some insurance (B&C is peanuts but life and CIC etc well worth while) and probably push solicitor intro etc.

Now frankly, every one has to earn a living - and I openly admit we 'push' a solicitor intro where no free one in mortage deal (we receive an intro fee, but we think the firm is excellent [we have used them exclusively for 3 years + as a result], deal regularly at Senior Partner level and have a dedicated man who liaises on cases on a daily basis if necessary), we like to sell insurance (but really work at the advice and planning bit) and other bits and pieces. The difference is we are operating on the side of the buyer not the seller - and sellers should concentrate on getting someone equally good on their side !!

michael1234

Just to update, our buyer was rejected by NatWest. We have no information as to why. He has now promptly gone and applied with his own bank (Halifax).

The news we have is that he already as an aip and then Tuesday last week went into his branch (he also has his main current account with them) to apply for the full mortgage. He was apparently told there and then that he passed the credit check but still needed to provide them with some more documents.

Today, we've been told that he will get a decision in 48 hours.

I've also found out that he has a 25% deposit.

But we're still really, really anxious.

Is it generally the case that if you get declined from one bank, then they will all turn you down?

ginger_cat

I worked for Natwest as an underwriter and whilst things may have changed since my days, they generally dont like it if you have gone else where and there is an offer on the table from someone else. Was a big thing in my day and usually indicated by the credit check when the case was submitted for offer - the computer system automatically does this as certain stages.

Re the underwriter situation they used to and the bank I worked for after did too have 'low risk underwriting' which was generally mortgages with a lower loan to value (customers with a higher deposit) and good credit rating.

For it to be knocked back at that stage would indicate either something on the final searches such as another offer or the valuation. Don't hold me to it but that has been my experience.

becca0417

We were rejected 2 mortgages post-valuation. So it does happen.

DPJames

It sounds like Natwest found out he already had an offer on the table from elsewhere so it looked like he was applying for two mortgages. Double the debt, double the risk. It'll have been flagged up and he'd have been refused for this reason alone. All he should do is go back to the Halifax and get his "Already agreed" mortgage from them. So there should be no worries for you with regard to that anymore.
Why he went to the Natwest after already having an offer from the Halifax though is anyone's guess.

Good luck with the completion.

luckyfool

I've never heard of RBS/Natwest declining a case because a client has has an offer/agreement in principle with another lender. In fact even if he did have a credit searched aip from Halifax that would not be visible to Natwest anyway as the Halifax aip does not leave a footprint.

More likely, one of 2 or 3 scenarios took place,

1. There was a problem which came up in the valuation. I don't think this would be the case as if it was you should have really been told as I don't see why the buyer would expect the situation to be different with another lender. In fact they would probably use it as a negotiating position to try to get the price down.

2. More likely, the broker used the Natwest online application system for the decision in principle (i.e. the website, rather than MTE). The website credit searches and credit scores agreements in principles and applications, but bizarrely it does not actually apply policy rules when checking the case. i.e. It can give you a pass score and say yes, even if the case does not actually fit criteria on affordability, or adverse credit, or any of a number of other rules. To actually get a solid decision from Natwest you actually have to submit the decision through MTE (which is a third party application system), which is a pain, but at least the agreement in principle is actually worth something.

3. Finally, Natwest typically require at least one bank statement as part of their underwriting checks. It could just be once it has hit the underwriters desk they have looked at the bank statement and seen something they don't like that would not be picked up on the credit check. e.g. bounced payments, unauthorised overdrafts, gambling habit... who knows.

sophievenusdoom

michael1234 wrote: »

Hi

We are really, really worried our buyer won't get his mortgage since my wife has her heart set on a house which we can only get if we sell ours. This is what we know.

Our purchaser applied for his mortgage nearly 2 weeks ago with the "independent" mortgage broker at our estate agent. The mortgage survey was done 3 days ago on Tuesday. It has come back without significant problems.
He has apparently got a good deposit and good job but that could just be estate agent waffle.

However, we've just been told its been referred to the underwriters and he should have a decision on Monday. We are really, really nervous and certainly won't enjoy this weekend waiting.:(

Is is very likely to be bad news ? Why wouldn't he have been referred before they commissioned the survey ?

Any thoughts most gratefully received!

We had exactly this when we applied for our mortgage - they took the surveyors fees and conducted our survey after which time they then sent our application to the underwriters. Don't worry, we were still accepted, and our mortgage completed not a day later than promised

xyellowx

DPJAMES- He probably went elsewhere to save a large chunk of money
halifax gave me a mortgage offer £1296p/m banked with them 20years
first direct same mortgage £1064p/m,

£232 p/m cheaper x 60 mpayments =£13920 saved
thats why people look elsewhere