Would U Pay lots extra to complete mortgage on time??

onthebreadline · 12 February 2012 at 11:56AM

Hello

I am FTB and have bought a property at auction. I MUST complete on 1st March, if I do not, I will lose the property and the 10% + 1% commission I paid on the auction day.

I waited a week to see FA RE mortgage (that my solicitor recommended), and was a bit miffed that he had actually had a survey done on the property without my say so, and appeared with papers for me to sign without discussing options. So long and short of it is;

Would you pay around 60.00 to 80.00 MORE a month for 2 years in order to receive mortgage on time and not lose property and deposit? WHAT DO I DO?

If I arrange myself,(I have actually started the ball rolling - got a quote, sent copy of 1 payslip(which is all they asked for!!!) and paid for a survey to be carried (which could be cancelled today - if I change my mind) there is no guarantee I will get an firm offer(see my 2 problems below) or receive on time. ( Am I worrying too much?)

I have two problems(at least I think they MAY be problems)

1. My payslip has a different address - I was supposed to move in with OH but never did and didn't bother to change my address back to home address.

2. I don't think I am registered at my home address(parent).

What do you think/advise AND What would you do?

Thank you for taking the time to read this. xx

poppysarah · 12 February 2012 at 12:18PM

Did you do any research before you bought the property?

thegirlintheattic · 12 February 2012 at 12:37PM

Your post is hard to understand.

Is this right? You went to an auction without having a mortgage offer in place or having discussed with a FA what kind of mortgage rate you would get. You brought the house. You then went to a FA who then offered you a mortgage which is £60-£80 more than what you thought you would be paying. You have now got a cheaper quote (off the high street I presume) but have yet to get a firm offer.

Do you have the money to pay the extra for two years?
What is the amount you stand to loose? Is the more or less than the extra you would pay?

Your problems proving where you live are a concern. This will make most lenders very uneasy and you will likely face delays and a worse rate if they give you an offer at all. You will usually be expected to provide employer references before an offer is made, this could slow things down. As you are not on the electoral role, if they decide to offer they will want a utility bill or sworn statement from a professional to prove your residency there. Not being on the electoral roll may also lower your credit score = worse rate.

You've got two and a bit weeks to get this sorted - I would personally pay the extra for the mortgage offer on the table - especially with the issues you have with payslips/electoral register.

Notmyrealname · 12 February 2012 at 12:39PM

Hmm...let me see....

Assuming the auction price was £80k.

Lose £8800 coming out with nothing vs paying £1920 extra in mortgage payments. Its a no brainer. Whatever the outcome, think of it as a stupidity tax and then hopefully you'll not repeat said stupid act of going to an auction without a mortgage available.

onthebreadline · 12 February 2012 at 1:11PM

poppysarah wrote: »

Did you do any research before you bought the property?

I take it you mean research on the property?

Yes, I went to BS and they told me max they would lend - which is considerably more than the purchase price of the house.

I also now have a quote of my monthly payments, which is 30.00 cheaper than FA's but he wanted me to either add on Ins or pay his 1% commission, which brings the difference to 60.00-80.00 per month more.

onthebreadline · 12 February 2012 at 1:35PM

thegirlintheattic wrote: »

Your post is hard to understand.

Is this right? You went to an auction without having a mortgage offer in place or having discussed with a FA what kind of mortgage rate you would get. Buying at auction in scotland is different - the BS will not give a mortgage offer until you have the property. You brought the house. You then went to a FA who then offered you a mortgage which is £60-£80 more than what you thought you would be paying. No, not what I thought I would be paying, once I purchased the property, I got a quote from the BS which quoted 30.00/month cheaper than the FA'S quote, but I had to either take INS or pay his 1% commission, which brought the ovepayment to 60.00-80.00 per month MORE over 2 years. The arrangement fee - I could get at 495.00, he quoted 1,000 You have now got a cheaper quote (off the high street I presume) but have yet to get a firm offer. - Correct

Do you have the money to pay the extra for two years?
I have - but obviously this extra would help do it up.
What is the amount you stand to loose? Is the more or less than the extra you would pay?
The house, and my deposit, as if it is not completed on the date, I will be responsible for the house, the difference if it is re-sold at auction at less than I paid and my deposit.

Your problems proving where you live are a concern.
I only changed address at my work, I still have ALL my bank statements and my Mobile phone bills(before they went paperless,) at my address,
This will make most lenders very uneasy and you will likely face delays and a worse rate if they give you an offer at all. You will usually be expected to provide employer references before an offer is made,I was told they would not need to contact my employers by the BS AND FA this could slow things down. As you are not on the electoral role, if they decide to offer they will want a utility bill(this is the address I have stayed at since 1969 - my parents home) or sworn statement from a professional to prove your residency there. Not being on the electoral roll may also lower your credit score = worse rate.

You've got two and a bit weeks to get this sorted - I would personally pay the extra for the mortgage offer on the table - especially with the issues you have with payslips/electoral register.Thought this might be a problem which is why I am now - stressed out.

I did speak to my BS, who said once they have my payslip and check it (monday) and the valuation of the property (tues/wed) as they will NOT make an offer of mortgage until they know the value of the property, their offer could be with me as soon as Thursday. !!!!

G_M · 12 February 2012 at 1:35PM

Mad. Totally mad.

Sorry you have brought this on yourself.

'Research' covers many things (I hope you did all the others) AS WELL as the finance.

You should never bid at at auction without your fiance in place. 'In place' means a firm offer, with the lender having checked and fully confirmed
a) you as a viable borrower
b) the specific property as a viable security for the loan
c) the max price available on the basis of BOTH a) and b) above following valuation of the property and
d) a firm mortgage offer.

As for now, speed is of the essence. Go for whichever mortgage you can get confirmed and arranged fastest, irrespective of cost.

To any other posters considering buying at auction, please do not follow this example - learn from the OP's error.

Get all the Legals, searches, valuations, surveys and finance in place before getting carried away and raising your hand at auction. Get a book on how o buy at auction and/or use the internet to research it.

If your solicitor later finds a problem with the legals (a reason many properties end up at auction!) you cannot pull out.

If your mortgage lender later says they will not lend because your address is wrong, or the property is not a suitable security for the loan, you cannot pull out.

If the Local Authority reveals a road is planned through the garden, or there is a public right of way, or the water is not connected or it was built on an old rubbish tip or...or ... or.... you cannot pull out.

tulipz · 12 February 2012 at 1:43PM

If not try Halifax? I got an API yesterday...their advisor told me they can get an offer in my hands in 1 weeks time.

Thy have decent rates at e moment....

onthebreadline · 12 February 2012 at 1:52PM

G_M wrote: »

Mad. Totally mad.

Sorry you have brought this on yourself.

'Research' covers many things (I hope you did all the others) AS WELL as the finance.

You should never bid at at auction without your fiance in place. 'In place' means a firm offer, with the lender having checked and fully confirmed
a) you as a viable borrower
They would not do this, all I got was a quote of how much I could borrow, based on my salary.
b) the specific property as a viable security for the loan
This was OK
c) the max price available on the basis of BOTH a) and b) above following valuation of the property and
This was also OK - got the max figure they would lend, and homebuyers report (although not up to date) was much more than I would have bid.
d) a firm mortgage offer.
Not sure if Scotland is different, but BS (or anyone else) would NOT give a firm offer
As for now, speed is of the essence. Go for whichever mortgage you can get confirmed and arranged fastest, irrespective of cost.

To any other posters considering buying at auction, please do not follow this example - learn from the OP's error.

Get all the Legals, searches, valuations, surveys and finance in place My solicitor, got all the legals, searches, knew the valuation, last survey supplied and finance would/could not be in place as they said - did not know if I would win the auction. before getting carried away and raising your hand at auction. Get a book on how o buy at auction and/or use the internet to research it.
So, although it looks as if I have been stupid, I did get the seaches, legals, etc done, the only worry is Am I a viable borrower? - no debts, no credit cards except one which has not been used, always, I mean ALWAYS in credit at the bank and have enough savings for a 15-20% deposit.

If your solicitor later finds a problem with the legals (a reason many properties end up at auction!) you cannot pull out.
There is no problem - they have ALL been checked out.
If your mortgage lender later says they will not lend because your address is wrong,This is my worry or the property is not a suitable security for the loan,Not a problem in this case you cannot pull out.

If the Local Authority reveals a road is planned through the garden, or there is a public right of way, or the water is not connected or it was built on an old rubbish tip or...or ... or.... you cannot pull out.These check have all been made, BEFORE auction - and were obviously OK.

Thanks for your time replying, I know is sounds Utterley and completely MAD, but I done as much as I could BEFORE the auction. My stupidity came from waiting a WEEK to see a FA when time was NOT on my side.

onthebreadline · 12 February 2012 at 1:55PM

tulipz wrote: »

If not try Halifax? I got an API yesterday...their advisor told me they can get an offer in my hands in 1 weeks time.

Thy have decent rates at e moment....

What is API?

And by the way - it is Halifax I have got my quote from, faxed my payslip to, and paid for the survey - this is for their peace of mind and I am NOT worried about the valuation at all. They want to know if the property is worth what I paid, so they will lend me.

caeler · 12 February 2012 at 1:56PM

It is worth finding out from the Auction if there is any slippage on 1 March? I would imagine they would refer back to the owner to see if they will wait? I bought a new build recently and they told me I had to exchange in 28 days, what they really meant is they needed to see if I was serious and getting things moving and if they saw that evidence they would give me a bit more time. By the skin of my teeth I managed to exchange on time, not really sure how!