Mortgage approved...what now?

alexia88

Hi Everyone,

A few of you may have read my post last week with me fretting over my mortgage application being accepted due to past credit problems (3 late payments in 2009, showing as 111 but not 123 on my Equifax report) and various other things.

Our mortgage broker had decided on some mortgages for us but could only arrange 80%, we did it ourselves through Natwest as thought we could get 90%. Applied over the phone and was referred to an underwriter, forms arrived on Friday, we sent them off that day (strangely though, the forms simply asked for our signatures and to confirm the direct debit account for mortgage payments).

I got a text yesterday saying that our mortgage application had been received and we'd get a decision in 5 working days, my partner then got a text asking him to call Natwest regarding our application, he called and was told the application had been approved for a 90% LTV, for us to take a bank statement to a branch showing our deposit, asking the name of our solicitor, arranging a valuation of the property and let him know that they had sent a letter to my employer confirming that I was out of my probation. Half of the deposit is a gift from my parents, they've saved up my child benefits and monetary gifts as a child for me to have a house deposit. My mum and dad paid this in to my partner's bank yesterday as he is the lead applicant on the mortgage and wrote a letter confirming everything.

It all seems to be running far too smoothly, literally a mortgage approval 5 days after putting an offer in on our property.
Is this all now? Is everything practically set in stone or can it all go bottoms up even at this stage?
Have we actually got an agreement or an AIB, this is so confusing. We are both FTB and our parents bought their houses when the market was so different and can't really advise us.
After reading these boards I know I could have asked all of the relevant questions to the bank, but they asked my partner to call and not me, so I don't think I can speak to them.

Any help would be gratefully received!

Thrugelmir

So far so good. Little point in speculating on what or may not happen. If the valuation of the property stands up then you should receive a formal mortgage offer shortly afterwards.

alexia88

Thank you for your reply.
The valuation of the house could possibly have been an issue, it was originally on the market for £150k but it has a short lease of 59 years, the bank are aware of this and gave us an odd repayment term (27) years to ensure there was still 30 left at the end of the mortgage. We also argued this with the vendor who accepted our offer of £140k in light of the fact it will cost us 12k to extend the lease for 80 years.
It is a first floor purpose built flat, downstairs has a lease of 125 years and is valued at £170k, and last time ours was valued two years ago it was £155 so I'm hoping it should be OK.

Thrugelmir

All lenders have different policies.

Often lenders require the lease to be extended prior to purchase. As the cost of same will need to be negotiated.

Once under 70 years is left on the lease. The property will be regarded as a wasting asset and its value diminish accordingly.

alexia88

The short lease was the main reason we applied with who we did, they took the short lease in to account.
The vendor has agreed to extend the leasehold and we hope to do it very shortly, this has been put in writing to the solicitor.
Hopefully it gets through the valuation, the flat was already reduced from £160 to £150 after a sale fell through a few months ago.
Our solicitor thinks that the reason they accepted £140 is because that is what it is worth with the short lease.
Seems like the valuation is all we need then?

Thrugelmir

alexia88 wrote: »

Seems like the valuation is all we need then?

Is the vendor dealing with the lease extension?

alexia88

As far as I'm aware they own the freehold on the property and are willing to extend the leasehold, they have chosen not to do it themselves though as they had been renting out the property and now something has come up and they need to sell it.
This is my main problem, my boyfriend is dealing with speaking to everyone because he has a lot of contacts in property due to working in the family run building contractors, but because he is speaking to them I am getting everything second hand.

Thrugelmir

alexia88 wrote: »

As far as I'm aware they own the freehold on the property and are willing to extend the leasehold,

That makes the position simple.

Try and get the maximum extension you can negotiate!

alexia88

That's brilliant, you've been really helpful. We've negotiated an 80 years extension for £15000 which seems reasonable.
Hearing everything second hand has been a nightmare, I've literally been sitting on these boards reading through posts and know what I should be asking, he seems to pick up the phone get really excited and forget!