Recourse on declined mortgage?..just looking for a reason why?

toofy

He is already 18, and the area in town is not looked upon as student accommodation, there may be rented properties, but I am not lead to believe they are students, the property next door is a public authority owned
rented house to a middle-aged lady who has lived there for 12 years..

opinions4u

So why does he need a 4 bedroom house?

Or a 3 bed house with two bathrooms?

toofy

Why not?...if he/we can afford the mortgage why would it make any difference?..Perhaps after he qualifies in his degree he may want to then rent the house and move on, or he may have a family of his own to accommodate and remain in the house. In the mean-time if he wanted to take on 2 lodgers with him I am lead to believe he can do so legally without any problem as he will be living there on a full-time basis too..where is the problem with that?

opinions4u

While he can legally take on lodgers, he needs the lender's consent to do so. They are not obliged to provide that.

But, the answer to your question is absolutely clear.

The mortgage application has been declined because the underwriters believe that the intention is to purchase the property with a view to letting it.

That belief is driven by a number of things.

1) Your 18 year old son hasn't even been offered an unconditional place at university, therefore there is no guarantee he will need the property.

2) The number of bedrooms / bathrooms doesn't fit with the profile of the intended resident of the property.

3) The property is already let.

4) The price range is also consistent with BTL mortgage properties in student areas (which would be outside Halifax's typical BTL criteria).

It doesn't quite add up. It's not the kind of mortgage they want to get involved in. The underwriter would be insane to put his name to it.

thomasdown

The problem is the financial advisor you saw advised you wrong. You applied for a Residential mortgage and not a buy to let mortgage.

toofy

We applied for a Residential mortgage as my son will be living there and he is a dependent..it is not intended to be rented out to strangers. In fact there is a strong possibility his sister will follow him to the same university in 2 yrs time, and will also need accommodation, so why pay 2 sets of accommodation fees in halls/ other peoples rented houses when they could share the same house?

thomasdown

I totally get what you're saying, but you have mentioned that his friends will be living there as lodgers which is rent and the fact that its a 4 bedroom house. The Halifax probably have picked up on this and this could be a reason why you got declined? This opens up a whole lot of avenues which I'm not an expert on but will cause many implications I guess?

toofy

I have said there may be potential for lodgers, but that does not mean there will be...would it be that wrong for my son to live there all on his own, should that be his wish?..And why would an underwriter be insane to approve a mortgage on a 50k house with a deposit of 20k being put down?

kingstreet

Whether you are doing it or not, the lender THINKS you are going to let this property to students and has shied away from that possibility. Was this application declined before or after the surveyor carried out his valuation inspection?

toofy

They declined before the valuer had even inspected the property, that's why they have offered me my money back..