Lowering Offer after Offer Accepted

doorstop12

Hi all

I recently had an offer of £167,000 accepted on a property. I have £26,000 to put down so requested a mortgage of £141,000.

This was agreed in principle and I received a certificate which stated that I could probably borrow up to £152,000.

I've just been notified that they will only offer £137,000.

I appreciate that it was merely an offer in principle and don't intend to appeal this (unless anybody suggests it is worth doing so?). However, this leaves me with another £4000 to find up front. I can only find about half of this. Has anyone found themself in a similar situation?

Someone suggested that I should renegotiate the offer price to £165,000 so and proceed as before. Is this acceptable practice? I'm keen not to upset the vendor.

Any other suggestions would be very welcome

***ADMINS - I also posted this in the buying / selling forum as I wasn't sure which category it should fall into. Apologies ***

kingstreet

Why has the mortgage amount been reduced?

Is it for income/affordability reasons, a loan to value limit on the product, or is it down to the valuation of the property?

doorstop12

My broker hasn't actually told me. I only submitted the application a week ago so I'd imagine the valuation hasn't yet been conducted? I will double check but I'm assuming it is based on my income / expenditure.

Wh05apk

The maximum was probably reduced because they have found other commitments such as credit cards not declared, do you have any?, did you declare them, if not and they will be repaid, you may be able to get them ignored, which could increase the maximum loan size?

There is also nothing to stop you going back to the vendor and saying you can only get a mortgage of £137k, therefore the maximum you can pay is now £165k, and see if they go with it.

kingstreet

Was the information provided to the lender at AIP stage different to that submitted at full application?

As Wh05 asked, was there undisclosed credit, or did your broker input the wrong income figures?

You need to ask the broker for an explanation before you think about asking the vendor for a price reduction for no fault of his...

doorstop12

Thank you for the prompt and helpful responses.

I have no regular outgoings except student loan which is deducted from my monthly pay and a £15 phone bill.

I don't pay any other direct debits, standing orders etc and haven't used my credit card for about 18 months (nothing owed).

My income details have not changed since the whole process began.

I have since e-mailed the broker and will let you know his response.

Thanks again.

GMS

Did you tell the broker you had a student loan? If not and it was noticed when the payslips were submitted it may explain the lower amount.

doorstop12

GMS - I made the broker aware of the student loan right from the start. I gave them a comprehensive breakdown of my income and omitted nothing.

Thanks

kingstreet

The question is - did the broker disclose the student loan to the lender?

doorstop12

I think the broker worked from the net income figure. The one I gave her was post-student loan deduction.

kingstreet

Lender systems ask for gross annual figures, broken down by basic, overtime, commission etc.

Loans are entered in a different section, listed by lender, amount, monthly payment, remaining term etc.