Lender refuses to approve mortgage can we appeal the decision? what the process?

sonastin

From the banks perspective:
worst case scenario is that you never make a single mortgage payment. So they've paid 75% of the property's "value" without getting anything in return. They go through the cost and expense of repossessing the property which further increases their bill. And now they've got a house to sell with structural issues and the (albeit small) possilibility of underpinning with all the associated negative press that that attracts. And as it is a repossession, buyers will be expecting a bargain, big discounts, lots of money off because it has structural issues - if they can even find a buyer who is interested in the first place.

They'll be lucky if they can sell it for what it costs them to lend against it, repossess it and re-market it. £4k off for underpinning doesn't make it any more attractive to lend against.

From the banks perspective, this is too fraught with potential problems which aren't really quantifiable so they can't manage the risk. You're facing the same problems (difficult to resell) but from your perspective, that is offset by getting to live in a lovely house in the meantime. Without sufficient benefit to the bank, it just isn't worth their while getting involved.

wdbamber

All, if there is an isolated issue with the drains which has been identified and repaired, why should this frighten any furture potential buyer should i wish to sell. I have the the structrual reports proving no problem. All three structural surveyors have said they would not have seen the problem if the house had been maintained in a good state of repair. so now the repairs to the house are complete and as long as the house does not move again and does not require underpinning, the house will not have any hangover issue!

All works will be warrentied and guaranteed. I apprecaite that some people will always be put off, but we feel as a long term investment and more so in a location we want to live for the longterm it would be a good option.

if we avoid the underpinning and keep house well mainted surley that will not be an issue. we thought the house insurnace would be the issue not the mortgage

Any thoughts

Thanks

TB

sonastin

wdbamber wrote: »

I apprecaite that some people will always be put off,

That is the point. I think you are underestimating how many people it will put off. Or overestimating the intellect of the average buyer - not everyone understands structural stuff and *any* hint of a structural problem will make them nervous regardless of how historical or irrelevant you in your professional capacity know it to be.

Read a few of the threads on this forum regarding subsidence, surveyors advice, uncertain information etc - The advice is always to walk away if you are unsure. It is even a feature of this thread. That is what you are up against when you come to sell. You can probably find another buyer like yourself who understands the issues and carries on regardless but you are reducing the pool of buyers who would be interested.

Its a risk that you are prepared to take because the house suits your needs. It is not a risk that the bank wants to take and they'll lend their money elsewhere. You need to find a bank as enlightened as you or increase your deposit to reduce the lender's exposure.

kingstreet

wdbamber wrote: »

The house has been repired and no other hosue in the street has shown any of the same issues therefore shows as a isolated case.

What i am quering is why a straight no and not a reduced mortgage loan value to take some of the risk away from the lender! !

any helpful advise would be useful Thanks.
again guys

TrB

Do you have any means of contacting the surveyor who carried out the mortgage report and valuation?

I'd expect the reports and surveys you supplied to the lender to be referred to the surveyor for his comments and possible impact on his original valuation.

If you can get hold of him, he's likely to be very cagey, so you'll have to phrase your questions carefully. Ask him if he was shown copies of the reports, if so did he feel the security was affected by the reports? Ask him if he valued the property for another lender, would he confirm the property was suitable security for a mortgage at the price you agreed.

It's not going to get the decision changed by this lender, but it will tell you if it's worth proceeding with an application to another one or whether you're better off out of it.

sammy66

the lender wasnt kensington by any chance??

kingstreet

sammy66 wrote: »

the lender wasnt kensington by any chance??

Interesting you should say that. I was just reading the thread to see if the name was mentioned.

sammy66

Mmmmmm I'm just waiting for a reply back from them, they have sent one letter saying how sorry they are to hear of my complaint and that they are looking into it! I can't wait for their reply ...

kingstreet

Heard last week Kensington won't "mess around with retentions" and if the property has essential repairs they'll simply decline it without negotiation.