Northern Rock - AIP

brooklh

We sold our house and put a deposit down on a new build after c

hecking we could get an 85% mortgage with Northern Rock. We earn good money but have credit card debts which we declared. They gave us an AIP for £185k (we need £165k), and so we instructed solicitors. We submitted the mortgage app, paid booking fee and had our valuation done but now they have said we can only have £131k, where do we stand? I am about to contact the Financial Ombudsman. Thanks

MarkyMarkD

If any of the information submitted in the full application contradicts the assumptions made or information given to get the AIP, then a lender is quite entitled to revise its agreement downwards.

rosieposey1972

To be honest going to the financial ombudsman wont make much difference. Northern Rock gave us an AIP 3 weeks ago then revised it 4 days later as they hadnt actually credit checked us (this was all through our broker and he told us this). Our current lender offered us 16k below what we needed after originally offering us the full amount and it took them 10 days to tell us this. Finally we recieved a mortgage offer from Abbey National for the full amount last Friday.

From what i can gather it is standard practice to offer less than the AIP once the underwriter has looked at it. Go elsewhere, someone else will lend you the amount you need. We have a lower monthly payment than we were quoted with our original lender but the downside is that we have redemption fees to pay as we havent had the mortgage that long.

Have you gone through a broker or did you approach Northern Rock yourselves?

Bwooks

We went through a mortgage broker who has been dealing with this for us. We had to go to Northern Rock because they are the only ones doing new build mortgages with 15% deposit. No information has changed and we were entirely honest so I can't see how they are within their rights when someone has commenced conveyancing, paid for a survey and wasted about £1,000 on fees to go back on their word! That makes AIP's worthless! We need £15k less than the AIP amount offered.

little_miss_muppet_face

Northern rock did the same to us 5 years ago, gave us an AIP, we paid £500 arrangement fee, then said that they could not offer us a mortgage.. My solicitor tried to get the money refunded but did not have any luck, at the time my husband was a FTB and could really have done with not losing that money.

shy2011

there will be other lenders that do the 85% on new builds. The Nottingham Building society do for a start as thats who i went with.

_Andy_

brooklh wrote: »

We sold our house and put a deposit down on a new build after checking we could get an 85% mortgage with Northern Rock. We earn good money but have credit card debts which we declared. They gave us an AIP for £185k (we need £165k), and so we instructed solicitors. We submitted the mortgage app, paid booking fee and had our valuation done but now they have said we can only have £131k, where do we stand? I am about to contact the Financial Ombudsman. Thanks

You are wasting your time contacting the ombudsman. Firstly as you (by the sounds of it) haven't exhausted the lender's complaints process and secondly as there is no valid complaint, given that the lender is not obliged to make an offer after giving AIP.

Bwooks

So, Andy, an AIP is worthless and in future I should not do anything until I get my formal mortgage offer (no valuation, instructing solicitors etc.)? I wanted to know what to do after the complaints procedure had been exhausted etc.

As it goes now, they have offered us the full amount. Their fault, they changed their procedures whilst this was all going through and started calculating affordability on gross instead of nett income, hence the problem, its all resolved now though.

I must say, Northern Rock have always been very friendly and helpful when I have had dealings with them.

_Andy_

Bwooks wrote: »

So, Andy, an AIP is worthless and in future I should not do anything until I get my formal mortgage offer (no valuation, instructing solicitors etc.)? I wanted to know what to do after the complaints procedure had been exhausted etc.

As it goes now, they have offered us the full amount. Their fault, they changed their procedures whilst this was all going through and started calculating affordability on gross instead of nett income, hence the problem, its all resolved now though.

I must say, Northern Rock have always been very friendly and helpful when I have had dealings with them.

I'm not saying it's worthless, just that it's not binding etc.