Mortgage pulled?

kingstreet

We are at risk of blowing this issue out of all proportion. It does happen, but it happens rarely and it happens because at some point someone, be that the broker or the applicant, has got something wrong.

It hasn't happened to me and it sounds like it hasn't happened to your broker either. As I mentioned, your audit is over and done with, so you are in the clear. The risk at audit is really confined to fast-track cases where lenders accept reduced status checks for those with lower LTVs and higher credit scores. If you go through the full status procedure the chance of audit and therefore of offer withdrawal is drastically reduced. Essentially, audit is simply moving the full status procedure to later in the process.

It's designed to keep applicants and brokers honest in not trying to obtain a self-certification deal via the back door route. IMHO an honest applicant truthfully disclosing all relevant information has nothing to fear.

As we've already discussed ad nauseum, the only way to avoid the possibility of offer withdrawal after exchange is to exchange and complete on the same day. Where that's not possible, being audited earlier would be my preferred safeguard.

cankle

Blimey!!! Ever wish you had kept your mouth shut!!! lol I am glad I started this thread though, it has both terrified me and reassured me in erm unequal amounts!! I believe my broker/lender knows all there is to know about my financial situation so I am hoping I have nothing to fear! Afterall this it amazes me why anyone would put themselves through this house buying malarkey more than once!!!! _pale_

alexia88

This thread has scared the pants off me, to the point that my boyfriend has banned me from reading it anymore!
We've just signed contracts, and our completion date is the 20th, I asked if we could exchange and complete on the same day but our solicitor said our lender is extraordinarily slow at releasing funds so would rather us leave it for a longer while to complete to avoid penalties and fees if they were to be slow at releasing. Fingers crossed, can't wait to stop scaring myself silly

woowoley

Reading that I am convinced Ive done the right thing in saying I want to exchange then agree a completion date not on same day!

cankle

Ive added a poll just out of interest to see what the general consensus is

Pupnik

This thread is scary! I was going to just complete a week after exchange because it is the norm but I am going to ask about completing on same day to try and be safe. Our financial situation hasn't changed (no loans or anything) so I don't think checks would show anything shady but worrying needlessly seems to have become a habit during this process. I can't wait until it is all over and the keys are in my hands, with nothing but mortgage repayments to worry about (nearly half our monthly rent so not worried about that!)

Yorkie1

Look, the number of times there are problems between exchange and completion are pretty rare, even with the scaremongering on here. If you trawl the forums you will find equal numbers, if not more, where sellers or buyers have pulled out on the day or day before a combined exchange / completion date.

There are risks inherent in doing anything. But there is absolutely no need to get them completely out of proportion and take drastic action as a result.

And yes, I do remember it being stressful being a FTB - only 18 months ago.

ruggedtoast

I was worried about it as my solicitor was useless. I called my lender twice. Two different people said they were 100% happy they had done everything and they just needed the title from the sols. It put my mind at rest but of course they were within their right to pull the mortgage at any point up til completion if they want.

If you want peace of mind don't buy a house.

jamesd

r83 wrote: »

for instance our mortgage offer is to be withdrawn after exchange and before completion, do we loose all our deposit we would have paid to developer?

No. Merely failing to complete by 2PM on the agreed day does not cost you your deposit.

The stages that can follow failure are a formal "notice to complete" that makes "time of the essence", then a court order for "specific performance" of your obligation under the contract - to complete the purchase.

You should find that the contract you enter into at exchange has a clause that covers a cost to be paid by you to the vendor if it becomes necessary to issue a notice to complete to you.

You are not out of negotiating options if a notice to complete is served on you. The vendor can agree with you to give you more time than the ten working days you would normally get under the standard contract terms. They may well require documentary proof of progress before doing so, to try to ensure that you don't let them down (via your lender) a second time. It will be vital to keep them very well informed because you really are at their mercy at this point.

If an order for specific performance is obtained then you're expected to liquidate all the assets you have to get the money to do it, if that's what it takes. Don't count on a good mortgage deal, a fast one is what you'll need - and that may be expensive even if you use it for only a month or two.

If you still fail and they eventually sell for a lower price you are going to suffer badly financially. You have a potential liability for the whole of their loss that arises from your failure, not just the amount of the deposit. That can be very expensive in a falling market or if you paid more than the market price for some reason.

If they think they can get a better price they might both seek your deposit as fast as permitted and remarket the property. That is their right. However, if they get a higher price you might not lose your deposit because that would mean that they suffered no or little actual loss from your failure to carry out your obligation.

In today's market they will probably be happy to have a buyer and give you more time to get a new mortgage in place. No guarantee but that's the likely outcome.