Mortgage lender 'overexposed' on development

Kent_FTB

Hi all,

Long-time lurker here, finally decided to register and need some advice

My background - aged 26, currently living with parents, my girlfriend and her son are renting privately at the moment. We have decided to move in together (shared ownership scheme where we are looking to purchase 35% of a £135,000 property).

We initially made a joint application but were declined as my partner was (unknown at the time) not listed on the electoral roll at her property, this has now been resolved but she won't show up on there for another month or so, so broker has suggested I make a sole application (I earn around £24,000 + commission a year so this is manageable).

I have a default on my credit file and a couple of late payments so was a bit worried initially, but broker sent off my application to the Leeds and obtained an AIP (a week and a half ago), however has called me today as he has just spoken to the Leeds. They have said they are "over-exposed" on the housing development we want to move to - it's new-build - so can't lend us the money.

We had applied for 90% mortgage with them, he has said he can apply for an 85% mortgage with the Woolwich (we can cover the other 5% deposit required) but I was just wondering if anyone had been in this situation before? Is over-exposure a relatively common problem and is there a chance the new lender could reject us on these grounds also?

kingstreet

Typically, a lender may not wish to mortgage more than a certain percentage of property on a development. This may be 25%, 30% is varies from lender to lender.

It can happen again. There are limited lenders for Shared Ownership business, so you are fishing in the same small pond as the other buyers on that site.