Mortgage application ground to halt - can I start another?

daleksec

Any advice gratefully received.

We are more than two months into the process of buying a house (and selling), and all the legalities (which were not straightforward) are almost sorted out, and we could very soon exchange contracts except .... we have still not had our mortgage offer confirmed by Santander. They have made it a condition that we get the seller's buildings insurance transferred to us, because of a problem which their valuer identified, but which our building surveyor and a structural engineer we paid to do a detailed report both think is insignificant.

The seller's insurance company will not agree to transfer the insurance.

It seems to take Santander 10 days for any piece of information to get from arriving with them to being seen by anyone who can make a decision. I have rung them to discuss the insurance problem to try to speed things up but they say this has to go through our solicitor, so he is dealing with it. So it seems we will now not get an answer (on whether Santander will remove this condition and accept we take out a new building insurance policy) for yet another ten days, at least, probably more, and then the answer may well be no and we may be right back at the beginning.

My question is - we are minded to just start again with another lender. Is there any reason (apart from the possible loss of any fees we pay) that we cannot start another mortgage application whilst we wait for the outcome of the existing application?

Santander are so slow, and really give the impression that they don't want to lend us the money. They have absolutely no sense of urgency - staff when I ring always express surprise that I am under any type of time pressure, or that I might think a turn around time of ten days for any communication is not reasonable for a mortgage company.

(We applied through a broker and I have contacted her to say we need an answer from Santander by the end of next week and I would like her to try to speed the process up but I'm not holding my breath there...)

Second question - I just can't understand this whole idea of transferring the benefit of building insurance policy. I have been told the reason to do it is that the insurer cannot say that a problem pre-date you starting your policy. It seems to be asking the insurer to take on a retrospective risk and I can't see why any would agree to do it Has anyone experience of this or can explain it?

Thanks

Thrugelmir

Sounds as if the property has suffered subsidence in the past and the insurer is unwilling to continue to insure the risk. Once the existing owners vacate the property.

bigadaj

The insurance issue probably goes back to the original problem, stating this might allow a more definite response.

Remedial works may have been undertaken under that insurers policy and cost, and so other insurance companies may not take this on, or at least exclude this element in the cover. The irony is that if it was subsidence then fixing the problem actually makes things worse in insurance or liability terms, the potential fr subsidence is down to ground conditions, but a house next door to another, one of which has been underpinned and one not, then the one that has been treated is viewed still as the more risky.

I would expect the structural engineers opinion to carry weight, depending on how far he is prepared to commit, as his PI insurance would then potentially come into play.

Thrugelmir

bigadaj wrote: »

I would expect the structural engineers opinion to carry weight, depending on how far he is prepared to commit, as his PI insurance would then potentially come into play.

Report(s) obtained one assumes are for the borrower not the lender.

The lender may ask for additional undertakings which may illicit a more conservative response.

bigadaj

Thrugelmir wrote: »

Report(s) obtained one assumes are for the borrower not the lender.

The lender may ask for additional undertakings which may illicit a more conservative response.

But liability could be extended with agreement of the engineer, probably subject to a relatively small fee, this is what we would do ina not wholly unrelated field, all speculation anyway if the OP doesn't confirm the nature of the problem. If the problem is subsidence then the issue would probably be the time and expense of compiling and monitoring of any potential issues which could be significant.

daleksec

Thank you for your comments.

The problem that the valuer identified is small cracks in a wall - he suggested there might be subsidence. Our structural engineer said he thought it was a small amount of movement in the past due to drainage problems around the house, now resolved.

However, the problem is not that the insurance company do not want to insure the house - the are quite happy to do this. It is that they will not do this "transferring the benefit of the seller's policy" to me. As I understand it (but I may have got completely the wrong end of the stick) the mortgage company want us to some how "take over" the existing buildings insurance, not just start a new policy in our name from the day of completion. My solicitor said this is so that the insurers can not say at a later date that a problem arose before the start of my policy (hypothetically, if there was more movement and it was due to subsidence, the insurer could say that this problem happened before I bought the house, but if the policy is somehow "transferred" then they were insuring the house before so would still have to pay).

As I said before, this just does not make any sense to me. And in any case, even is I could get my head round the idea of an insurer taking on a risk of something that happened in the past, the insurance company say they do not do this (nothing to do with the particular house, I had given them no details of the property when they said no).

Any more thoughts on this gratefully received - but more because I don't understand than because there is anything I can do.

My main dilemma at the moment is whether to apply for another mortgage whilst waiting for the very slow wheels of Santander to grind on - any pitfalls to doing this? (other than the fees)

Thank you for you patience - perhaps not the clearest question ever.

bigadaj

Continuity of insurance can be important for issues that may have either developed over time or for which the exact time of occurrence cannot be determined. Liability would be held by the company if you just had a new policy with the current owners insurers, but it sounds as though you're not happy with Santander.

Loss of confidence in parties normally means that the relationship can't usefully be extended so going to a different lender makes sese.
There are complaints about Santander from people and reports of issues with them, difficult to tell if these are representative or not but I'd look elsewhere if I were you.