Mortgage application in process but now interested in another property

coolguycp1

Dear friends,

I have been looking to buy a property having lived on rent for 5 years now. I liked one property (A) on the market and noted interest on it through a solicitor, at the same time I engaged L&C to submit a mortgage application on my behalf for the property (A). The application is now with the underwriters and I am waiting for an AIP which is due anytime soon.

When I told my landlord that I shall be leaving soon, my landlord offered me to sell his property (B) to me which I am renting from him. I quite like his property which is quite similar to property A, albeit bigger. The landlord is also open to negotiations around my budget and within the mortgage amount I have asked for property A. However, there is no home report yet for this property, so I do not know of its exact valuation

How do I get the lender to now lend me for this property B, as the AIP will be for property A? Do I need to submit another application and do another credit search since I am not changing the mortgage amount required but just a different property? How will this affect L&C mortgage advisor's work?

holly_hobby

The AIP is performed on you as oppossed to the property - so a change of property (pre survey) should not present a problem in itself.

Of course your affordability etc shall have to meet requirements of the replacement purchase - which if higher than the first - may require a re-assessment of income etc.

So, if you are sure you prefer to proceed with Prop B instead of A, contact your broker/lender to advise ASAP, ensure any progression to survey is stopped on prop A, and instead replaced with the the details of prop B ... (higher survey fee may reqd dependant on pch price).

Hope this helps

Holly

coolguycp1

Thanks Holly,

My mortgage advisor had told me that he will provide me with an AIP from the lender for making an offer on property A, but the fees related to making the application will be charged by the lender only once the offer has been accepted, so that I do not pay the application and valuation fees without knowing the status of my offer.
On the other hand, as my negotiations with the landlord has just started today, nothing is on paper yet from either side for property B.

My thoughts are to wait till I get the AIP from the lender as I will not be paying till this point, then speak to my landlord first and negotiate with him to arrive at the price he is willing to sell (subject to the valuation of the property). If it happens as per my plan, then to speak to the mortgage advisor and tell him to direct the mortgage (same amount) for property B instead of property A. If not, continue with making an offer for property A.

Please advise if this is the right approach.

coolguycp1

Friends,

Any suggestions if I am thinking on the right lines here?

Thrugelmir

Personally I would revisit property A and decide which property I prefer.

Otherwise property A may well be sold while you dilly around.

What if your landlord and you fail to agree on price of property B.

holly_hobby

coolguycp1 wrote: »

Thanks Holly,

My mortgage advisor had told me that he will provide me with an AIP from the lender for making an offer on property A, but the fees related to making the application will be charged by the lender only once the offer has been accepted, so that I do not pay the application and valuation fees without knowing the status of my offer.

Thats not an AIP - thats a full application/underwriting, with just a hold on survey until the UW has passed reqd checks. (to ensure no fees are incurred if the application is declined).

Regardless, of changing the property to be purchased it will not affect the current UW process on your status i.e verifying income, checking credit history etc.

coolguycp1 wrote: »

On the other hand, as my negotiations with the landlord has just started today, nothing is on paper yet from either side for property B.

My thoughts are to wait till I get the AIP from the lender as I will not be paying till this point, then speak to my landlord first and negotiate with him to arrive at the price he is willing to sell (subject to the valuation of the property). If it happens as per my plan, then to speak to the mortgage advisor and tell him to direct the mortgage (same amount) for property B instead of property A. If not, continue with making an offer for property A.

Please advise if this is the right approach.

Thats fine - just ensure that the current application is noted not to go to survey until instructed to do so.

This will mean that you will (hopefully) have your mge in place, and ready to progress to survey as soon as you elect the property to be purchased.

As I said in my initial post, do make sure that make your choice of property with a level head.

Hope this helps

Holly

coolguycp1

I have now got an AIP with the lender. I have also made up my mind to buy property B, which I am currently renting. My landlord has, in the meantime, engaged his estate agent to do a valuation on his property. That does not make any sense to me as how can the estate agent do the valuation without using an independent surveyor, which they are not doing?

Also, my lender will do a separate valuation on the property which will determine how much they can lend me and this will be my price limit for the property.

As there is no independent valuation (or Home report) being carried out by my landlord, should I ask him to engage a professional independent surveyor as well as a Home Report that will give me property conditions in detail? I have lived in his property for a year and there seems to be no major issues, however, I would like the peace of mind with the Home report.

Thrugelmir

coolguycp1 wrote: »

I have now got an AIP with the lender. I have also made up my mind to buy property B, which I am currently renting. My landlord has, in the meantime, engaged his estate agent to do a valuation on his property. That does not make any sense to me as how can the estate agent do the valuation without using an independent surveyor, which they are not doing?

Also, my lender will do a separate valuation on the property which will determine how much they can lend me and this will be my price limit for the property.

As there is no independent valuation (or Home report) being carried out by my landlord, should I ask him to engage a professional independent surveyor as well as a Home Report that will give me property conditions in detail? I have lived in his property for a year and there seems to be no major issues, however, I would like the peace of mind with the Home report.

Your LL is merely obtaining information to ascertain a value for the property which will form the basis of negotiation. EA's are free......

Correct, your lender will ask for a valuation to be done on any property you purchase.

Are you in Scotland?

coolguycp1

Yes, I am indeed in Scotland.

coolguycp1

How correct are the valuations done by EA's and are they normally closer to the valuation done by the lenders?

coolguycp1

I have secured a mortgage AIP with ING Direct. Can I ask them to do a valuation on a different property to the one which I had put when making the application as I am now in negotiaton for the property I am currently renting?