Does a decision in principle actually mean anything?

markimark1984

Hi all,

I applied for a mortgage on a shared ownership house a few weeks ago.

I got in touch with an IFA who works very closely with sovereign and ticks all the boxes for this kind of mortgage.

After a credit check I received a decision in principle from Halifax for £99000.00 so my mortgage request for £25000.00 was well under what they were "prepared" to lend me. The DIP was subject to me providing the correct information - tick! and a satisfactory valuation on the property.

I received notification that my application for the mortgage had been accepted and the Valuation would then take place on Thursday last week, and I'm assuming it came back fine.

Now my problem is that Halifax have come across a linked address on my credit report. I have run an experian and an equifax report for myself and can't figure out what the problem is as I had no bad debt from that address, plus it was over 6 years ago. So now the mortgage is at risk.

I have asked equifax to remove the address, which the woman on the phone was quite confident in doing an online request with me for that reason.

Fingers crossed it will be removed and I can continue!

Now since the DIP was provided after my credit check AND my mortgage application was accepted, I have now forked out over £900.00 in solicitors costs and valuation fees only to find out it could all be for nothing.

Where do I stand in recovering these costs from Halifax if the mortgage doesn't go through? Surely if my credit was checked before the DIP was produced they should have seen this linked address then?

Thanks in advance.

Mark

kingstreet

What does the key facts illustration given to you before you applied say about the fees. They should be described as refundable, or not refundable.

The legal costs you have chosen to expend (if that has actually happened yet) and you will still be able to continue with your purchase, perhaps via a different lender, so nothing lost there yet.

FWIW until your mortgage is actually completed, a lender can pull out at any time if any adverse information comes to light.

markimark1984

Thanks for your reply.

The valuation fee is not refundable once it's been carried out. So I'll have to check whether or not it has been.

I'll ask my IFA about the rest of your points, thanks.

holly_hobby

An AIP (as Halifax provide) is based on public domain data, ie the search will reveal any CCJs, Bankruptcy Orders and Voters roll data (which is why its called a soft serach).

Any AIP is given on the understanding that the income details are correct, and that there will be no adverse data or inconsistencies revealled between the search and the info contained within the AIP.

Its only upon submission of a full application that a full credit reference agency (CRA) search is conducted, which reveals warts an' all ie the above public domain data, plus details of all financial accounts both active and redeemed in the last 6 yrs, any default/adverse credit data over the same time, financially linked individuals, other names you may be known as, linked addresses and other bits and bods ....

The issue with a (non-disclosed) linked address, is it infers possible attempts to hide adverse info - and the lender will see it as non-disclosure, even where there is no negative association .... so thats why its an issue.

However, in your case this association is completely wrong. You have contacted the CRA to correct, but if the link is registered by a firm, you may have to contact the data controller of that firm to have they amend the info directly with the CRAs.

Incorrect linking of addresses is pretty common (even happened to me and a lady with the same name many miles from me, in Leeds, by the catalogue company Redoute !!). I contacted them directly, and after a discussion and their checking of their records, I had them correct the error, as it was just quicker than leaving it the CRA (experian in my case).

If you explain to the lender the situation, and have it amended and the firm confirm their error, you should be fine (as long as everything else bottoms out of course).

Your broker (if advising for a while) should be well versed in this, and should be able to get this sorted without issue.

Hope this helps .. try not to worry x

Holly xx

markimark1984

Thanks Holly,

That was very helpful.

I will start to contact them today.

Mark