Led down the garden path by the bank !!

Islaboo

A year ago we went to our bank starts with a H (not sure if I can name them) to see what we could get in the way of a mortgage.

They offered us £106k on my husbands wage as we have a large deposit. This allowed us to look for a house in the £190k price range.

we found one, got a successful offer for £186k ,Paid for the mortgage and paid for the homebuyers survey via said bank.

Paid also £500 for our solicitor to start doing searches etc.

The sale fell down on the survey, it was hideous but despite knowing we would lose money we had to pull out.

Fast forward to last week when we saw in independent mortgage adviser who couldnt work out quite how halifax had come up with this OIP for us on my husbands wage. when we delved into to offer with him it turns out the bank has used tax credits and child benefit I get for my other two children while leaving me off the mortgage.

So in effect they are using someone elses benefits who isnt even going to be on the mortgage.

When we queried this with Halifax (an adviser in a different branch) she said there was no way we could do this and what they think the original woman has done is put it through knowing full well that it might get flagged up and we wouldnt have got the actual mortgage.

Needless to say we are pretty !!!!ed off. A year wasted trying to find a house when in fact we can only borrow £90k and thats not enough for a house here just a flat./

We feel we should have been told she was trying to do a crafty and put through the mortgage on the hope that it wouldn't get flagged up. In that case we wouldnt have offered and surveyed the original house or paid for that mortgage knowing it might not go through.

Am I justified in feeling pretty peeved and wanting to make a complaint or is this actually just the way things are done in order to get people mortgages?
We are £1k down on losing the original house and yes it was our choice to pull out on the survey but we would never have even looked at the house if we knew we could actually only borrow £90K

I hate this house buying lark its no fun at all

mrsmchapman

Am I right in thinking most lenders only offer 4-5x salary, so were you not a little surprised at the amount they had suggested? Do you have loans, car finance etc which would bring down the mortgage amount.

[Deleted User]

mrsmchapman wrote: »

Am I right in thinking most lenders only offer 4-5x salary, so were you not a little surprised at the amount they had suggested? Do you have loans, car finance etc which would bring down the mortgage amount.

If the offer was £106k before and now the offer is £90k that means following the 4 - 5x rule works.

If they assumed they would get 5x the salary and they only got 4x then his salary is £22,500 per year. If they got 5 x it would be £22,500 * 5 = £112,500, greater than the actual £106k offer.

Adds up!

StuC75

Many lenders have changed there criteria over the past year.. First time round the larger deposit & so lower loan to Value ratio may have allowed them \ underwriters to overlook the high earnings multiple.. For the bank to have used benefits \ Credits in the original calculation they must have been told about them?


In the current climate theres every chance that what may have been on the market for £186k last year could be snagged for 170k now, so even with lower mortgage & deposit still in place that gap can be bridged...

Islaboo

Sorry I probably didnt explain properly,
It wasnt to do with my husbands wages or being offered less because the market changed.

The issue was that they used my child benefits and tax credits to bump up his offer (even though 2 of the 3 children arent his and only 1 dependent down) They did this while also leaving me off the mortgage.

No different to say using a benefit his mum might get even though she wouldnt be on the mortgage.

This can't be done they have said this now but it was done on the OIP meaning we made offered and tried to buy a house we could never afford.

We were surprised at how much we could borrow but we went to the mortgage adviser who advised us its their job after all so had no reason to question it.

ACG

You had no reason to question why one bank can offer you double all the others?
I think you do have reason to question that.

To answer your question, yes you can probably put a complaint in. I still think some of this falls on you but i imagine the bank will pay out as the majority of it is on them.

That being said... why are you not going on the mortgage? If you being on the mortgage allows you to get what you need then surely it makes sense for you to go on it?

kingstreet

It is clear in Halifax criteria that tax credits and child benefit can only be used if both parties to them are party to the mortgage. As the OP has stated, they should not be using income where one of the recipients is not one of the borrowers.

The case should not have been accepted and when you tried to provide evidence, it would have been rejected. If the case was "fast-tracked" no evidence might be required, but this is just "self-certification" through the back door and lender shouldn't be doing it!

Formal complaint and on to FOS if not resolved with refund of fees, expenses and compensation of a hundred or two...

Islaboo

Just a quick update.
As i said before Im not going on the mortgage as I have 2 further dependents. This brings the mortgage offer down more than if both me and the tax credits are left off.

In our defense they arent offering double what other banks are, they are offering £16K more which we assumed was because they are the bank we are with and knew our history etc. I dont think its overly naive to think we should trust them for a relatively small amount more.

Having said all this to halifax they are still saying they can count our one child we have together with regards to tax credit and benefit even though its still paid to me and im still not going on the mortgage due to my other children.

I have emailed them again so we can get an answer in writing but the fact still remains they said we could have something we most likely would never have got and its cost us money.

Thanks for all the replys.