Please Help - Mortgage Deal in Principle?

Linksedge

I made an application for a First Direct Mortgage over the phone. I gave them all the relevant information and they told me that based on this information they would be willing to offer me £80,000 over 25 years. I said I was willing to go along with this and they issued me a 'personalised illustration' detailing the same deal as discussed over the phone. I completed this and returned to them with all the proofs they needed.

I recently spoke to them and they now tell me that they can offer me £70,000 over 36 years and cannot tell me why this figure has changed. I provided all the relevant proofs and nothing is untoward. I am a first time buyer with no financial commitments whatsoever so the information I gave the second time is no more detailed than in the initial telephone conversation!

I understand that the illustration is not legally binding but given that no details have changed (which they have accepted) is there not such a thing as a deal in principle? Are they not obliged to honor the deal if they cannot offer an explanation as to why the offer has changed? I feel they have completely wasted my time!

Please help...all advice is welcome!

Thanks in advance,
Nick

CloudCuckooLand

Their later offer will not be solely based upon the written answers, they will also have used the time to check credit records, electoral roll etc, which they would not have had time to do at the time of the telephone "estimate".

There may be something hidden in your credit record. Or they could just have had a selection of "better" applicants who get prime access to their limited funds.

herbiesjp

Agreements in principle or illustrations are not binding.

Even mortgage offers can be withdrawn up until completion.

Something has changed somewhere - or a mistake was made somewhere.

Either way First Direct will not agree the mortgage you need, so you need to look elsewhere and find a lender that will stick to the figures you need.

First Direct have been guilty of cherry picking clients (along with some other lenders) and this may be the case here (although you have not given any figures to work with).

If you are purchasing a property i.e. had an offer accepted etc, you will need to move quickly to place with another lender, as agents/vendors get twitchy if valuations are not done fairly quickly.

You can either go direct (and could come up against the same problems) or go via a good whole of market adviser.

hshen

AIP/DIP is not worth the paper it's printed on.
Mortgage offer is much better but no where near done deal.

Someone correct me if I'm wrong but until you complete lender can withdraw the offer for whatever reason they feel like.

I found brokers to be useful. They have enough experience to point you to a lender with a lending criteria in your favour. Definitely recommend getting a fee-free one.