Mortgage application with Halifax

tkitmike

Wow, what a pain.

I put an offer on a new build in the last week of July, spoke to New Homes Mortgage helpline and they confirmed what I could borrow (more than required) and sent over their adviser.

Just to note, I'm a first time buyer, self employed with 2 years of accounts and 3rd years predictions, no repayments/debt and an A credit score.

Submitted my application off to Halifax and received back an offer in principal a week later.

After completing the survey, requesting an accountants reference (clear) and details of existing customer contracts, they have turned my application down (5 weeks later)

To me this feels absolutely ridiculous, I have proved I can more than afford the mortgage, I have the 20% deposit ready to be transferred and since the 'offer in principal' nothing has come to light, infact my accountant and contract details put my earnings above what I had calculated.

So I have now lost the valuation fee and I'm furious that Halifax have turned this down, when I had been told that this was pretty much a 'Done deal'.

Can anyone shed any light, or tell me of any similar experiences?

GMS

How much higher were the figures from the accountant? May have aroused suspicion.

What reason have they given for the decline?

Teh valuation may have come back unsatisfactory. Were any incentives from the builders offered?

xyellowx

been told in past halifax are not one of the best lenders to deal with if self employed

tkitmike

Hi GMS,

Figures from accountant were marginally better, not enough to arouse suspicion.

The property is on a new scheme, which means you own the property 100%, but you only pay 80% of the price and anyone who buys the property later on, also only pays 80% of the value. It's written into the deeds. - However, they knew this when they did the Mortgage agreed in principal..

The reason was simply, they look on it on a case by case basis and on this occasion they have decided to decline my application..!

GMS

Do you have a cash deposit? If you do you may be better looking for a 'standard' purchase.

xyellowx

get a ima they will know who to apply to next

tkitmike

Hi GMS,

I'm 99% sure it isn't the scheme as Halifax were fully aware of the scheme and had actually already completed a number of properties on the development.

NHMH are now applying to another lender on my behalf.

I'm bitterly disappointed, as I've now lost the valuation fee and I wouldn't have proceeded if they didn't like my figures, I only did as they said it was a a very simple case.

GMS

The problem could be they do not want to be over exposed on the development. Lenders do not like to have too many properties in single locations as they could in theory need to repossess and be open to a loss on them all.

Could be as simple as that, and this would not necessarily be picked up at the application stage.

opinions4u

It's not a simple case.

You've not got three years accounts.

The property is not a "normal" purchase.

You're borrowing above 75%.

I am surprised that they let it go to valuation without making sure everything was checked out first. I think they've initially based the lending on the full value of the property, rather than the 80% share that you're buying. This has inflated the credit score initially achieved.

If you do complain, ask them to clarify what changed between AIP and decline. If it's something that should have been clarified better prior to instructing the valuer you may have a case to ask for your fee back.

tkitmike

Hi @opinions4u

Thanks for your opinion.

Agreed it isn't a normal purchase and I don't have 3 years accounts, however they did know this at the agreed in principal date.

I'm borrowing 80% and they did also know this.

I agree, they shouldn't have let it go to valuation until they had clarified this first.

Agreed