I heard the bank does further checks just before completion

babytash

I've recently been a approved for a mortgage with Nationwide, it's a shared equity mortgage with the local government lending me 20% which is interest free over 10yr period, I've had to find a 5% deposit. Today I checked by bank current account and found out I went overdrawn by £87, which I immediately rectified (unauthorized overdraft for 2 days). I worry now that this will affect my completion as I heard the bank does further checks just before completion. Is it likely my mortgage offer will be withdrawn because of this? Should I inform my Broker about this? anyone else experienced this?

kingstreet

babytash wrote: »

I heard the bank does further checks just before completion

Where did you hear that?

No further credit check is carried out after offer unless you request an increase in the mortgage amount or loan to value.

Sometimes, cases are audited after offer, to sample the quality of the business and supporting documentation, but once again, another credit check is not normally carried out for this.

Finally, your exceeded overdraft will probably never appear on your credit file and it certainly won't appear until a few weeks have passed.

Relax. You'll be fine.

ruggedtoast

The solicitor runs bankruptcy checks after exchange.

kingstreet

ruggedtoast wrote: »

The solicitor runs bankruptcy checks after exchange.

After? Really? :eek:

Richard_Webster

Quote:
Originally Posted by ruggedtoast
The solicitor runs bankruptcy checks after exchange.
After? Really?

I think any reasonable client should tell his solicitor if he thought he might be made bankrupt, so if he is bankrupt, lender won't lend and more fool client for not telling solicitor.

Errata

the local government lending me 20% which is interest free over 10yr period,

I'm amazed. Which 'local government' would this be?

kingstreet

Errata wrote: »

I'm amazed. Which 'local government' would this be?

I did a shared equity case with Sandwell MBC last year. They did up a property they owned and sold it with a SE second charge offer attached to it - part of their social housing programme.

breadlinebetty

There's always TWO searches done when taking out a mortgage. Prior to Exchange the solicitor will check with the Land Registry to make sure there are no charges against the property for bad debt/bankruptcy.

Then on or the day before Completion, the solicitor does a second check with the Land Regisry to make sure no charges have been set against the property in the time between Exchange and Completion.

If there are charges against the property the solicitor has to inform the mortgage lender, who would more than likely withdraw their offer, and you would be liable for all costs - both yours, the buyer's, and the legal fees. You would also lose your deposit.

kingstreet

breadlinebetty wrote: »

There's always TWO searches done when taking out a mortgage. Prior to Exchange the solicitor will check with the Land Registry to make sure there are no charges against the property for bad debt/bankruptcy.

Then on or the day before Completion, the solicitor does a second check with the Land Regisry to make sure no charges have been set against the property in the time between Exchange and Completion.

If there are charges against the property the solicitor has to inform the mortgage lender, who would more than likely withdraw their offer, and you would be liable for all costs - both yours, the buyer's, and the legal fees. You would also lose your deposit.

So the bankruptcy search isn't done after exchange? We did have a recent case where the applicant declared a bankruptcy to the lender at application, but then the solicitor did the search after exchange and it came up causing a problem.

I can understand another check for new charges as that would effectively prevent completion.