Applying For Finance Before Completion

CaveDweller

Hi All, I am completing on a purchase on the 25th of January. I want to take advantage of 0% finance on a new kitchen and bathroom with 60% off list prices. What I am worried about is if the additional finance applications will cause my lender to withdraw the mortgage offer in place. We have exchanged contracts, paid 10% to the vendor and are just waiting to complete.

Many thanks for any help you can offer.

tiggerjj

Hi CaveDweller.
Mortgage lenders do sometimes do a check between exchange and completion. They have decided to lend you money based on a certain set of financial information and situation, which by taking out finance you would change.....Is it worth having the mortgage pulled? As you have exchanged you are not committed to complete, with or without your mortgage.

If it were me, i wouldn't risk it...

UrWntr

tiggerjj wrote: »

Hi CaveDweller.
Mortgage lenders do sometimes do a check between exchange and completion. They have decided to lend you money based on a certain set of financial information and situation, which by taking out finance you would change.....Is it worth having the mortgage pulled? As you have exchanged you are not committed to complete, with or without your mortgage.

If it were me, i wouldn't risk it...

Out of interest, wouldn't this mean potential financial ruin for the buyer?

It's my understanding that on exchange of contracts the buyer legally commits to buy the property on the date of completion. If the lender pulls the funding and the buyer is unable to obtain a mortgage from another provider prior to completion, where does that leave the buyer?

opinions4u

Don't do it.

You would have to advise your mortgage lender and that might affect their affordability calculation. If you don't advise them and they re-credit check the case you could be left liable for the deposit if you fail to complete.

Wait until after completion. There will be other kitchens. Other sales. Other discount offers with a deadline.

kingstreet

UrWntr wrote: »

Out of interest, wouldn't this mean potential financial ruin for the buyer?

It's my understanding that on exchange of contracts the buyer legally commits to buy the property on the date of completion. If the lender pulls the funding and the buyer is unable to obtain a mortgage from another provider prior to completion, where does that leave the buyer?

We've had occasions on here where cases have been audited late on in the process and the offer has been withdrawn due to something appearing between application and offer.

The solicitor sending the Report on Title in preparation for exchange and completion can be the trigger for the lender to have another look, especially on "fast track" cases where reduced status requirements were accepted at the outset due to high credit score and lower loan to value.

Where exchange has taken place, the end result can obviously be the buyer's deposit being forfeited as a bare minimum.

Do not, under any circumstances apply for credit until completion has taken place.