Should we accept Home Improvement loan after exchange before completion?

shannon_brown

Hello,
Me & my husband have got mortgage offer from halifax for FTB shared ownership for 35% share in property.
We have put whatever we had in savings which is 20% of 35% share in property mortgage.
We thought we will have no money to buy new furniture and other things so we applied for home improvement loan which is been approved but we have not accept it as yet!
The loan offer is valid for 30 days which falls few days before completion, we have not exchanged it yet!
I would like to know if we accept the home improvement loan after exchange before completion is it going to cause any problem on completion ?? And can lender withdraw their mortgage offer ?
We didn't know that lenders do credit scoring before completion & I suppose the loan had an effect on my credit score ??
We don't want to risk our deposit, please advise should we go ahead with that or not?????? I would appreciate if any mortgage advisor's advise us only please!!!!

Yorkie1

The lender can withdraw the offer at any time up to completion, and can credit check you up to that point too.

The general advice is not to take out any additional credit before completion.

Sorry - just realised you only wanted MAs' advice. Disregard everything I've written.

shannon_brown

Yorkie1 wrote: »

The lender can withdraw the offer at any time up to completion, and can credit check you up to that point too.

The general advice is not to take out any additional credit before completion.

Sorry - just realised you only wanted MAs' advice. Disregard everything I've written.

My credit score would be lower now cause of that Home Improvement loan application??
Will this cause lender to withdraw the offer even if I don't accept loan ?

betmunch

If you are recredit scored the loan search could cause you to fail the credit score. if you take the loan you could also fail on affordability as well as credit score AND you have a responsibility to declare the material change to the mortgage lender. DO NOT ACCEPT THIS LOAN until after completion.

kingstreet

A lender may choose to audit a mortgage application any time upto completion. On doing so, if it discovers new information, or uncovers incorrect or inconsistent answers, it can withdraw a mortgage offer without explanation.

Do not apply for credit of any kind after making a mortgage application, until the mortgage is completed.

shannon_brown

betmunch wrote: »

If you are recredit scored the loan search could cause you to fail the credit score. if you take the loan you could also fail on affordability as well as credit score AND you have a responsibility to declare the material change to the mortgage lender. DO NOT ACCEPT THIS LOAN until after completion.

Thanks for your advise.
As it stands I have not accepted the loan so we can go ahead with the exchange & completion then ?
And recredit score is done on every morgage case or the ones get audit?

shannon_brown

kingstreet wrote: »

A lender may choose to audit a mortgage application any time upto completion. On doing so, if it discovers new information, or uncovers incorrect or inconsistent answers, it can withdraw a mortgage offer without explanation.

Do not apply for credit of any kind after making a mortgage application, until the mortgage is completed.

Thanks for reply.
Are you saying only if our case get audit then there would be issuse ?? But I have not yet accepted the loan yet would the case of asking for more credit it be issue as well?
And should we go ahead with exchange & completion next week?? I'm confused we really don't want to risk our all savings...

kingstreet

Audit is lender's optional final check and it can happen anytime, with no warning. Something like 8% of Halifax cases are audited. I can't tell you the stats for other lenders.

Simply applying for credit leaves a footprint, which will show up on a check done during audit. Taking up the credit, or otherwise is irrelevant.

I can't tell you whether or not to proceed. You have to consider the risk of audit and your offer being withdrawn. If in doubt, ask your solicitor.

shannon_brown

kingstreet wrote: »

Audit is lender's optional final check and it can happen anytime, with no warning. Something like 8% of Halifax cases are audited. I can't tell you the stats for other lenders.

Simply applying for credit leaves a footprint, which will show up on a check done during audit. Taking up the credit, or otherwise is irrelevant.

I can't tell you whether or not to proceed. You have to consider the risk of audit and your offer being withdrawn. If in doubt, ask your solicitor.

Simply applying for credit can lead to offer been withdrawn ?? :eek:

Thrugelmir

shannon_brown wrote: »

Simply applying for credit can lead to offer been withdrawn ?? :eek:

Yes. Could be the case that the prospective borrower has insufficient savings to fund the purchase.

shannon_brown

kingstreet wrote: »

Audit is lender's optional final check and it can happen anytime, with no warning. Something like 8% of Halifax cases are audited. I can't tell you the stats for other lenders.

Simply applying for credit leaves a footprint, which will show up on a check done during audit. Taking up the credit, or otherwise is irrelevant.

I can't tell you whether or not to proceed. You have to consider the risk of audit and your offer being withdrawn. If in doubt, ask your solicitor.

Thanks for you advise.
Our case is already been picked up for audit when we applied for mortgage in January 2012!
It went through audit without any problem and we got the offer in February 2012, do you think it can be audit again for final check because it's been audit already??