Santander mortgage advice please!

JoJoJoJo_2

Hello,

I was wondering if anyone could help/offer any advice.

We are (were!) in the process of buying a property from my father and as we are first time buyers, he was 'gifting' us the 10% of the property as our deposit for the mortgage.

The property was valued at £163,350 and minus the 10% (£16,350) left us with a mortgage of £147,000. This was agreed by Santander and we were offered a mortgage for that amount. We were told that a chartered surveyor needed to value the property before the mortgage could be finalised. A surveyor came the following week and had a look around the property and a week after that we had an appointment with the mortgage advisor at Santander to sign all the paperwork. We were told at this point everything had been approved.

The following week we received a phone call from the mortgage advisor saying that the property was valued at less than the amount agreed and that he was advised that the mortgage needed to be adjusted accordingly. (The valuation that the surveyor came up with was £155,000, where as the properties in our street are selling for between £160k-£180k.) Not surprisingly my father does not want to sell his property for that value, so we appealed our case. We found out today that this was rejected.

We have been told we have a booking fee of £495 to pay whether we go ahead with the mortgage or not and were after a bit of advice regarding this. We are confused as to

A) Why we were called to sign the mortgage paperwork and told all was ok to borrow that amount if they obviously hadn't received the details of the valuation at that point. Should this have happened as we were told originally the mortgage approval couldn't go ahead until the valuation had taken place, so if they didn't have the report, should they not have waited before getting us to sign?

As both parties had agreed to the original mortgage figure and the paperwork signed and now they are saying no to that amount and the mortgage can not proceed, do we still need to pay the fee if it is them are now declining us?

Thank you for reading and any advice is very much appreciated.

bigadaj

This depends on what information you have and what you've been told. If you've signed up to it then technically your liable, however if you haven't then you shouldn't have to pay.

If you have signed up then lodge a complaint, you may have to pay initially but see if they will refund and if not then go to the ombudsmen, no guarantees though.

Building_Surveyor

did you actually have a mortgage offer in your hand for what your dad thought it was worth?

paying the booking fee does not guarantee a mortgage and this is all explained a) by the adviser and b) on the mortgage application

swampduck

I'm a little confused - if the mortgage company have agreed to lend you £147000 then that should be fine. Their valuation is precisely that - in other words is the property worth what they going to lend you? They are saying it is worth £155000 so on that valuation they have no problem lending you £147k for a mortgage the fact that you father is gifting you £16k is immaterial as far as the mortgage is concerned.

Swampy

kingstreet

The mortgage process should work like this;-

Lender/adviser supplies initial disclosure document explaining service

Factfind carried out

Most suitable product recommended and key facts illustration issued

Mortgage agreed in principle

Property found and full mortgage application submitted and fees paid

Suitability letter issued

Lender instructs surveyor to value property

Supporting documentation given to lender

Mortgage offer issued.

Please compare this with your experience. How did it differ? Did you pay, or commit to fees only after receiving a key facts illustration?

Please clarify what you mean by;-

A surveyor came the following week and had a look around the property and a week after that we had an appointment with the mortgage advisor at Santander to sign all the paperwork. We were told at this point everything had been approved

as this suggests you had not actually applied for a mortgage, but a surveyor had been instructed. What were you being asked to sign?

kingstreet

If the valuation is £155,000, the deposit would have to be deducted from that to give a net price of £139,500. I guess the father balked at taking £7,500 less for his property?

bigadaj

kingstreet wrote: »

If the valuation is £155,000, the deposit would have to be deducted from that to give a net price of £139,500. I guess the father balked at taking £7,500 less for his property?

This makes me think, does your father in law need all the money now? If not you could arrange this additional money as an informal loan and just pay him back over the next few years. You would, of course, be overpaying for te house in the eyes of the alter but that would be your choice. This would have to be an informal arrangement however as the bank wouldn't accept this as a formal charge.

Simon_gloster

Where is the dad going to live by the way?

The lending would be subject to survey/valuation so you didn't have a firm offer just an AIP with a completed application.

Thrugelmir

JoJoJoJo wrote: »

The property was valued at £163,350 and minus the 10% (£16,350) left us with a mortgage of £147,000.

Who valued the property ?