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Mortgage refused after agreement in principle
miss_bentley
Posts: 5 Forumite
HELP!
My daughter and her partner have had thei rmortgage refused today after they were given an agreement in principle.
They live 280 miles away from the house they were going to purchase. They are buying the house and are intending to commute during the week and stay at the house at weekends. They will be staying with her partners parents the rest of the week.
They were totally honest with the mortgage provider and mentioned the distance many times. They were constantly assured that it would not be a problem.
The mortgage has been refused today, because the company says the commute isn't reasonable. (The two of them did the same commute for three years whilst my daughter was at Uni).
I have told them to ring the company and say that my husband and I will act as gurantors.
Does anyone have any thoughts or advice?
They are devastated and will lose money if they can't find a mortgage!
Many thanks!
My daughter and her partner have had thei rmortgage refused today after they were given an agreement in principle.
They live 280 miles away from the house they were going to purchase. They are buying the house and are intending to commute during the week and stay at the house at weekends. They will be staying with her partners parents the rest of the week.
They were totally honest with the mortgage provider and mentioned the distance many times. They were constantly assured that it would not be a problem.
The mortgage has been refused today, because the company says the commute isn't reasonable. (The two of them did the same commute for three years whilst my daughter was at Uni).
I have told them to ring the company and say that my husband and I will act as gurantors.
Does anyone have any thoughts or advice?
They are devastated and will lose money if they can't find a mortgage!
Many thanks!
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Comments
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A 280 mile commute is totally unrealistic and any lender is likely to turn it down. An Agreement in Principle would not have gone into enough detail for the distance.
What is the job situation? Could they relocate?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
A 280 mile communte isn't unreasonable. They did it for three years. My husband and I did it for six months.
They were totally honest during the initial porcesses - otherwise they wouldn't even contemplate it.
They will relocate when they have jobs - which means they may live apart and commute anyway.
Have rung London and Country for advice!0 -
Could the lender be thinking more about the cost of a 280 mile commute and therefore no longer hitting affordability?0
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No, I suspect they are thinking the applicants have no intention of commuting 280 miles, but will instead quit their jobs as soon as they have the mortgage and then look for jobs locally. i.e. They are lending based on an income which is not sustainable.0
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miss_bentley wrote: »A 280 mile communte isn't unreasonable. They did it for three years. My husband and I did it for six months.
They were totally honest during the initial porcesses - otherwise they wouldn't even contemplate it.
They will relocate when they have jobs - which means they may live apart and commute anyway.
Have rung London and Country for advice!
Obviously a 280 mile commute is unreasonable as the lender has declined the application. Is it 280 miles each way or round trip?
I do not doubt they were being honest but until the case gets to an underwriter no decision will be made.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
No, I suspect they are thinking the applicants have no intention of commuting 280 miles, but will instead quit their jobs as soon as they have the mortgage and then look for jobs locally. i.e. They are lending based on an income which is not sustainable.
Yes exactly this.
Would it not make more financial sense to both of them if they found jobs in the new area before buying a house?0 -
Excuse my bluntness, but why on earth are they looking to buy a house 280 miles from where they work?!?! Or have I missed something?
Why not just get a house near their work, OR, get jobs near to where they want to live...
Confused.0 -
Excuse my bluntness, but why on earth are they looking to buy a house 280 miles from where they work?!?! Or have I missed something?
Its not blunt. Its probably what the lender is thinking as well. Its also not uncommon for people who are looking to leave their current employment and relocate to put the mortgage application in before they hand in their notice. That way they appear to be in steady employment and not an issue. Long distance puts the lender on guard of that happening.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
miss_bentley wrote: »I have told them to ring the company and say that my husband and I will act as gurantors.
Does anyone have any thoughts or advice?
They are devastated and will lose money if they can't find a mortgage!
Many thanks!
Being guarantors will not help overcome the 280 miles factor. Guarantors only help when there is a shortfall on income.
What money do they stand to lose?I am a Mortgage AdviserYou should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
We are honest people.
The house was a bargain - new development - houses needed to be shifted!
They will relocate eventually - they are in secure jobs at the moment and would be foolish to move in the current climate. They can quite feasibly commute - Easyjet is very handy and yes they can afford it.
I think is is a shame that there is so much disbelief. What they want to do is totally genuine, but I think they just don't fit any boxes.
Ironically, they could probably get a Buy To Let mortgage. This will cost themm more money, but they don't want to rent it out. This may be their last and onlly option.
Iv'e seen the 80's stupidity of negative equity - this is a very sensible decision.
It is a shame we live in a world where your word is no longer your bond.0
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