Halifax Have Rescinded on a Mortgage Decision in Principle - What Can I Do?

Debt_Alchemist

Hi all,

My plan is/was to sell my flat, pay off my outstanding debts and move home - effectively starting again as my mortgage would be 25 years again. I accepted an offer on my flat at the end of January and as I had been given a Decision in Principle from the Halifax, began to look for properties to move to. I found one and contacted my (independent) mortgage advisor to confirm the mortgage offer, only to be told that 'the criteria has changed and they are no longer willing to lend me the amount stated in the Decision in Principle letter', despite the DiP being valid until 16 March 2012 and nothing having changed in my circumstances. According to my mortgage advisor, some changes in the financial sector have 'sent all lenders into a panic, and none of them are willing to lend'.

When the DiP was agreed, it was done so on a 90% LTV (the LTV is not detailed on the letter, only the maximum amount). The mortgage advisor now says that Halifax now want a 15% deposit instead of the 10% agreed previously (so now it's 85% LTV). With the deposit I have, after paying off my debts, this would effectively mean looking at a property with a purchase price at 70% of what had originally been agreed - not possible, unless I buy practically the same sized property in the same area I am in now, and there is little point in that. I will be speaking to another advisor to see if they are able to locate an appropriate deal for me, alternatively I will have to wait until I have sold my property and paid off my debts before applying again - even then if the lenders are not exceeding 85% LTV I am stuffed!

How is it that they can provide a Decision in Principle in which they state "Provided you meet the conditions of this Decision in Principle, we will be able to make you a full mortgage offer if you make a full mortgage application before 16 March 2012.", and then they can just rescind on it just like that?! It's not worth the paper it's written on! My circumstances have not changed, I was completely honest about my debts which I will be paying off on selling my property, and my salary and employment details have not changed.

I am about to write them a letter expressing my disappointment and amazement that they can and have done this. Can anyone suggest a way forward for me please.

Many thanks in advance.

Thrugelmir

Lenders can change their terms as they wish. A DIP is not a mortgage offer. Until a full mortgage application is submitted there are no guarantees.

kingstreet

Newbuild property by any chance? I can't recall anything changing in Halifax criteria recently which would affect loan to value.

Did you complete a full application and get a decline, or has your broker told you it's a non-starter with Halifax before that?

According to my mortgage advisor, some changes in the financial sector have 'sent all lenders into a panic, and none of them are willing to lend'

We need an explanation of what this ^ means.

Debt_Alchemist

I know it's not a mortgage offer but I can't understand how they can change the amounts so drastically!! Why bother to give a figure if it can be so significantly different to the actual offer?

Debt_Alchemist

@Kingstreet, my broker has told me it's a non-starter.

Debt_Alchemist

@Kingstreet - apologies I missed your other question. The advisor has just said that the lending criteria is changing daily and it is something which affects all lenders (not just the Halifax). I don't know any more than this.

Thrugelmir

Debt_Alchemist wrote: »

I know it's not a mortgage offer but I can't understand how they can change the amounts so drastically!! Why bother to give a figure if it can be so significantly different to the actual offer?

How much unsecured debt are you looking to consolidate into the new mortgage?

Debt_Alchemist

I'm using £32k out of the equity of the sale of my property to pay off my debts.

Dave_Ham

Was it previously on interest only AIP?

I am once again with Kingstreet though, this does not make sense. We would only find out an AIP has declined after being accepted if we promoted to a full application.

Then the old Halifax mortgage promise only checks a bit and the full application checks again and sometimes declines as initially only a soft foot print..

Thrugelmir

Debt_Alchemist wrote: »

I'm using £32k out of the equity of the sale of my property to pay off my debts.

Then you may well hit a stumbling block when submitting a full mortgage application in any event.

Debt_Alchemist

@Dave, no it is a repayment mortgage. I doesn't make sense to me either... nothing has changed from my end and I have fully disclosed all my debts which I will pay off on the sale of my flat. They knew this at the time that they gave the mortgage AIP.

@Thrugelmir, it seems more like a 10ft brick wall than a stumbling block at the moment.