HELP! Mortgage offer whithdrawal close to completion

worrier12

Hello - sorry if this has been posted on the wrong forum - I'm new to the game and desperate for some advice!

My partner and I are first time buyers and are currently in the process of buying a property in a new build developement. We have received a full mortgage offer from Ulster Bank, signed the initial contracts for the house and are awaiting our solicitor's receipt of the final documents to sign before completion, which is set for 24th Sept (we are hoping to sign these this week or next week!).

The only problem is that my partner (who is the main earner and first named on the mortgage) has recently applied for a new credit card as his 0% interest period was coming to an end on his existing card. However, his new application was declined for some reason.

I understand that the mortgage lender will perform further checks of your credit file close to completion and I have read a lot of horror stories of mortgage offers being withdrawn in the 11th hour as a result of these later checks. My question is, would something like a recent credit card decline adversley affect our mortgage offer and be likely to result in a withdrawal?

Any advice would be greatly appreciate - I am really starting to panic now!!!

Thanks

Hippychick

It's possible, if I were you I would instruct your solicitor to exchange contracts and complete on the same day, 24th Sept is not too far away.

If you exchange contracts beforehand and then your mortgage offer gets pulled you will be in deep doodoo's if you then can't get a new offer on time.

Hippychick

Just to add I don't think the fact that it was declined will show on your credit report, all that will show is that he applied for credit.

I might be wrong though.

Check which credit agencies the cc company and Ulster bank use, you may get lucky and they might not use the same agency.

worrier12

Thanks for the advice - my partner doesn't seem to think that the decline will show on his file either? He has done some research and apparently he could have been declined because he wouldn't bring much income to the cc lender (i.e. he pays his current card off sraight away before interest becomes applicable etc) so surely it would be unfair for something like a mortgage offer to be dependent on a credit card company's individual acceptance requirements?!

This house purchase has been nothing but stress from start to finish so I am quite paranoid that something else will go wrong now!

milliebear00001

I am paranoid about this too. Why on earth is he getting credit checked for stuff now?! Tell him not to apply for ANYTHING else, and keep both your accounts and all other financial commitments PRISTINE until you complete.

Best advice, as above, is to exchange and complete at the same time - no time for your offer to be withdrawn then.

worrier12

In all honesty we didn't really know that a mortgage offer would/could be withdrawn at the last minute - we naively thought that once they'd made the offer, it would take for something quite drastic like redundancy/bankruptcy/incorrect info on our initial application to cause the withdrawal of our offer. But now having read all the horror stories it seems that the banks could decide just to pull out if they are not happy at any stage?

I have checked with experian and the decline will not show up on your credit file - just the application itself. Even so, this worries me as the bank may just turn around and decide that they are not happy with any attempt to obtain further credit?

milliebear00001

Anything's possible with banks. You are completely at their mercy until completion - it's their money and they can do what they like with it, when they like. Don't forget that and play by the rules! Nothing you can do about the extra application. Some banks will run an extra credit check before completion, some won't. Sit tight, think positively and exchange/complete at the same time.

worrier12

Update on this - my partner has spoken with the credit card company who have told him that the reason the card was declined was because they made a mistake with his address details? The girl in customer services has advised that as the address details for my partner were incorrect then they would not have been able to do a credit search for him as they need the correct postcode etc to do this. It might just be me being cynical but is this true? I am hoping that it is as it will hopefully eliminate any worry if no attempted credit checks had been made?

Thanks!

milliebear00001

Well if they haven't run one, so much the better. You can check for sure by checking your credit record with Experian/Equifax, whichever the credit card co. routinely use.

Ankatden

It is a possibility as a minor difference on a postcode will foul things up.

Remember your lender may not even use same credit check agency as your cc company.

I would hold off on reapplying until after sale has gone through just to be safe but feel that probable there is nothing to worry about as if mortgage lenders didn't spot anything why would anybody else given you have already said he pays off balance every month.

goldbyron

I wouldn't worry if what you say is fact. Basically a credit card can turn someone down as they don't feel they would make any profit from them i.e they pay in full every month leaving no interest to charge. This same person should be ideal for a mortgage as you are not given credit but a loan and they want someone who pays the full amount every month as this is how they make money.