Agreed in principle, then declined after I've paid reservation fee on plot?!

tryingtosave21

My partner and I have been trying to buy a new build property. We used a financial advisor as my partner is self employed and has only got 2 yrs accounts. We got an agreement in principle from Hbos which we forwarded onto Bellway homes to prove we had it, and then paid the £750 reservation fee for the plot.

My financial advisor has just called to say that the actual application has been declined, as they have done credit checks now and there is 2 defaults from telecommunications companies for less than £100 each. They have both been satisfied and we didnt even know about them until a yr ago when we checked his credit file and saw that they had been put on completely without or knowledge. We paid them immediately and here we are now.

Are the HBOS allowed to give us an agreement in principle without doing credit checks? We have now lost this reservation fee

Any help would be appreciated !

kingstreet

Is there anything unusual about the application? Is it shared equity, or some other form of low-cost housing scheme?

tryingtosave21

No nothing like that, we have 25% deposit.

My financial advisor said that in the actual application he put in my partners middle name but not on the AIP, so they may not have done the credit search on the correct person. But how is that possible, there only is 1 of my partner with his dob at my current address so they are full of rubbish.

I'm really confused right now?

kingstreet

Hm. We are advised to ensure the information on the AIP matches EXACTLY what goes on the full application, to the point where full income details are now clarified before AIP and client "guesstimates" of their incomes and outgoings are just too risky to accept.

Whether or not his missing middle name made the difference is very difficult to establish.

Without knowing your details inside out, all I can suggest at this point is to let your broker sort it out, either with Halifax, or with another lender.

Let us know how things go. If anyone has any suggestions, I'm sure they'll help if they can.

tryingtosave21

No we definitely done exact earnings, we took them from the tax returns and my p60.

Thanks very much anyway.

PS. Do you know how the thing to do with the "hunter system"
Is this done after or b4 the AIP? Could it maybe be this?

kingstreet

TBH I'm not sure when the hunter system is checked. It may well not be checked at AIP, but done at full application as it is trying to track fraudulent activity.

For example, if you apply to lender A and state an income of X, the hunter system would flag that as a potential problem to lender B if the income stated on the next application is Y.

You can make a DPA S7 subject access request to National Hunter if you want to know what they have on you.

betmunch

Has your other half moved a couple of times in the last 3 years?

I had a client pass an AIP with Halifax, then fail the full application as they didnt bother to check his previous previous address on the initial AIP and he had a CCJ registered there he hadnt told me about.

I call Halifax to shout at them and was told its quite normal, they only check the current and previous address at AIP, even though you have to supply 3 years history with as many addresses as that might have! Anyone with more than 2 addresses in the last three years cant trust the AIP supplied by Halifax!

tryingtosave21

No Betmuch, we have been in the same property for over 4 years, although I only registered on the electoral role 4 wks ago.

Even so, AIP was only done 2 wks ago and was fine then, so how does the actual application then decline?

Our only hope now is Natwest, we have put an application into them as they agreed to consider a mortgage even with defaults as long as they weren't anything major.

I think its shocking the way the phone companies are allowed to operate!!

Thanks for your help

cameron80

hello

I've just had the same thing happen to me. I got an AIP with Woolwich for a new build, paid my deposit and now full application has been declined and dont know why.

my credit rating is excellent.

could it be something as simple as the address not 100% matching to what Experian have on record? (eg the way the address is written / flat number etc)?

they did 4 checks on my credit and that took it from excellent to poor. now i am stuck and looks like i will loose my deposit.

any advice please?

dunstonh

any advice please?

Ask the lender or your broker. Only they will know why.

paulmapp8306

My advisor told me MOST lenders do NOT do a credit check at AIP. they take income, outgoings etc and offer the AIP based on what you can afford. When the full application goes it - they THEN check. They assume any issues would have been declared at initial application so if they find things they tend to reject on two counts. Firstly the adverse history and secondly because you didnt declare it - so therefore may not be being truthful on other matters.

There are exceptions - that is those who DO do credit checks and he applied with Halifax as they are one that does. I have since found out though, that they "soft" search and they may still decline at a full "hard search" at full application. This does worry me as my credit file isnt good (mainly due to my job - as forces I move very regularly, and am on the electoral role at my parents for when Im posted to NI, Germany, Cyprus etc. All aloud however not taken into account by CRAs).

personally, i cant see how ANY lender can justify giving an AIP without checking credit files before hand. As far as Im concerned an AIP should be "if what you told about us about income, outgoings and debts is verified, then we will lend you £X against a house valued at £Y". It appears this is not the case though. Maybe a case for bugging MPs and getting this changed in law? How much do lenders make from fees on Full applications that would never have been applied for if AIPs had been turned down.