Totally Let Down by Halifax - any advice?

GerardWilliam

This is my first post on here and I'll try to keep it brief.

My wife and I fell for a house in Sussex last January. It needed a lot of work but the owners agreed to a completion delayed until the end of May. We applied to Halifax for a mortgage via a broker. We passed the initial checks and paid a valuation fee. The valuer said he could not value the property due to its condition but that when his list of essential works were completed he would value the house at the contract price.

An architect looked over the house and gave us a ball-park figure to put things right. Reassured by this and the time we had in hand, we exchanged contracts mid. February with completion set for the end of May, which has now been extended to the end of June.

We have worked flat-out for three months to get the house right, doing a very lot of the work ourselves. We contacted Halifax at the end of May who reappointed the valuers who confirmed a new value at the required figure.

However, last week Halifax start asking loads more questions about why we wanted the property? Source of deposit? (Which I explained was a loan from a friend to be repaid against the sale of our house in France, ie. nothing to do with this property) However, they have now declined our application even though there have been no changes in our circumstances.

With only eleven days to go until we are in default on our completion we feel totally shafted by Halifax BS. We were not told at any point that there could be additional hoops to jump through at this late stage and we cannot understand why these points were not cleared up before the original valuation fee was taken back in February. Any advice or suggestions where we might go from here would be very welcome. Ironically our loan to value is only 65% anyway.

Thank you for taking the time to read this.

ACG

A loan as a deposit? This should never have got to the stage its at should it? I dont really use halifax so im not sure on their view but i would be surprised if they allowed it.

Have they told you why they have declined it?

GerardWilliam

The daft thing is that our French B&B is on the market for more than the cost of the house we are buying and has no lending on it. The loan was given against this, with no repayments required until sold.

Again, I just wonder why they could not have asked this back in February. We feel we have been led right up the garden path.

Thank you for replaying.

kingstreet

Your solicitor allowed you to exchange contracts without a mortgage offer in place?

TBH this plan should never have proceeded on the basis it appears to have done. Until a mortgage offer is issued, the lender has not completed its underwriting requirements, so anything could be requested at any time.

A loan of any kind for the deposit would cause issues with most lenders as they will be concerned at the "lender" having an interest in the property.

Who arranged this? A decent broker would have handled this in a different way, so I hope one wasn't involved in the process.

In answer to your question, you now need a broker. Urgently.

Dave_Ham

This is not really Halifax's issue, rather the management of the process from what I can infer.

Had Halifax issued a full mortgage offer, if not which is what I suspect what did your Solicitor say about exchanging without a mortgage offer in place?

Next on the list is your existing broker. Ask your broker what they put on the application form for source of deposit. This should have been managed appropriately.

Poor broker, you need a better one and obviously quickly given what is at stake. It can be remedied from here, but stress for sure.

Thrugelmir

kingstreet wrote: »

Your solicitor allowed you to exchange contracts without a mortgage offer in place?

As Kingstreet has highlighted. This is the key to the whole issue.

GerardWilliam

again, thanks for all the replies. Our solicitor did advise us not to exchange without the formal mortgage offer but we would have lost the deal if we had held back. Having three months to do the work to the house convinced us that we could pull it off, and in respect of the valuation we have.

Our broker did the old trick of going on holiday without telling us and without delegating our case. We thus spoke to Halifax underwriters direct and mentioned the loan. Daft now I realise, as they advised it could only be a 'gift from a family member'.

Dave_Ham

Ouch...

I imagine there is no real merit in going over what has happened and you just need to concentrate on getting a mortgage offer as quick as possible..

Good luck

Dave_the_Ginger_Cat

Sorry, but if you chose not to take your solictor's advice, you'll be bound by the consequences, which I am sure they will have explained to you

I think you can do two things: Speak to the Halifax to see if they can add any more colour to their reasons for decline, and then find a new lender via a broker PDQ

Goldiegirl

The fact that a loan is being used as a deposit means that the Halifax decline wouldn't be reviewed.

Questions about the source of the deposit are standard underwriting checks. I imagine you put the application on hold back in February, so they never got the chance to ask you the question back then. Now that the application is proceeding again, they are just asking the normal questions, and haven't liked the answer.

You can't blame the Halifax for the situation you find yourself in, and you ignored your solicitors advice about exchanging contracts without an offer in place.

I don't know what your broker said about you exchanging contracts in this scenario, but any decent broker would have strongly advised you not to proceed.

But if you ignored your solicitors advice, I doubt very much if you would have taken your brokers advice either, unless he was telling you what you wanted to hear.

opinions4u

Halifax never committed to anything. Your solicitor advised against exchange.

You exchanged.

Your broker wasn't brilliant. You shafted yourselves. You let yourselves down.