mortgage declined after offer recieved

rani31

Hi, we recently made an offer on a house which was accepted. We had a mortgage offer in principle and survey was done by lender. All went well and we recieved an offer through the post a few days later.
When i phoned them they said the offer was made on the 7th sept, but declined by head office on the 8th! apparently we hadnt said it was going to be a holiday home.
anyway, while that is being looked into, we were getting the 25 per cent deposit by remortgaging our house which we arent selling as we are working in MK and house we were to buy is in Wales.
We were told today that lender for the remortgage did a drive by survey and decided as our house is timber framed, they wont lend the money.
We have about 50,000 pound equity in our house and were only borrowing 30,000.
We have already been told there is no problem with the money side of it also.We discussed just selling our house and renting up here where we work and that way we will have the deposit for the second home, but have been told we would never get a mortgage if we sold because they would class Wales as our main home and wouldnt be able to work and live there at the same time!
We seem to be caught in a no win situation, can anyone help advise us please?

puddleduck

I don't know anything about buying holiday homes, but leaving only 20k equity in your home sounds like trouble. 20k can be wiped off the value of it overnight and then you'd be in negative equity, so the whole plan seems quite risky for the lender.

hcb42

only £50K equity and two houses, doesnt sound great to me.

However, you seem to have a few issues

a non standard construction house which might be more difficult to get a mortgage for.

How often will you be in Wales? If it were me, and I only had one house, then I would think that would be my "home", the other place would be somewhere i rented midweek so i could get to work more easily.

pararct

Who told you the figures stacked up? If you want a timber framed holiday home you will have to save up for it.

rani31

the house in Wales is not timber framed, the one i live in now is.
We want to sell it, rent somewhere else so we can carry on working here and have the rest of the money for a deposit.
The problem being apparently, is if we sell the one we are in now to free up deposit, we won't be able to get a mortgage for one in Wales as lenders will assume we will live there all the time! when all we would be doing is going down there all weekends, holidays etc.
They seem to think that we would give up our jobs here to work down there which definitely isn't the case. They are assuming wrongly.

rani31

and as we can't remortgage current timber framed house to get rest of deposit or get a better deal as we can't change lenders either, we seem to be caught between a rock and a hard place.
All we want is to have a place in Wales we can go to when we aren't working.

poppysarah

rani31 wrote: »

All we want is to have a place in Wales we can go to when we aren't working.

All I want is a 20 acres plot in Devon with a beautiful listed building near the coast.

When I have the cash I will have one.

How much is your current house worth?

GDB2222

rani31 wrote: »

We were told today that lender for the remortgage did a drive by survey and decided as our house is timber framed, they wont lend the money.
We have about 50,000 pound equity in our house and were only borrowing 30,000.

You did not say whether that is 50k equity on a house valued at say 500k or 50k on a house valued at 100k. The first is 10% equity, the second is 50%.

If you sell this home, then buy the place in wales and rent in MK, the rent would need to be added into the lender's calculation.

rani31

All I want is a 20 acres plot in Devon with a beautiful listed building near the coast.

When I have the cash I will have one.

How much is your current house worth?




There is no need for sarcasm, i came on this site for advice.

GDB2222

rani31 wrote: »

There is no need for sarcasm, i came on this site for advice.

For what you are paying, I am afraid that you will have to take pot-luck. What happens if you sell in MK, then rent. How does that work out again? Are you sure you can't get a mortgage?

tiernsee

Rani sorry you are in this predicament.

If I've understood correctly you are buying a second property in Wales of which 25% will be financed by remortgaging your residential property in MK? If this is the case I don't think you can have two residential mortgages so this is probably why the bank has turned down the mortgage on the Welsh property. I am not sure about financing of holiday homes but I have heard that this is difficult and can't be financed with a residential or a buy to let mortgage. Maybe you could speak to a mortgage broker and explore any other options.

In terms of your own property, I assume you already have a mortgage on this? Was the remortgage greatly increasing your LTV ratio? It could be this coupled with the timber frame that is ringing alarm bells for the mortgage company? Again maybe you could discuss with a broker?

Hope you manage to sort it out - this house buying malarkey is not fun!