Mortgage fallen through

Almo

Will try and keep it short:

For a couple of months now our potential purchase has been dragging on. We are looking to take out a 60% LTV mortgage. We were out of the country for 6 years and have been back 8 months so have limited credit history plus fail eligibility criteria for several lenders. Neither of us have been in our jobs long, my partner 8 months and me 4.

Via a mortgage broker we went with a Woolwich mortgage. At mortgage valuation they raised an issue with the damp proof course, saying it had failed. We had a full survey done subsequently which said it had NOT failed, but that potentially plaster was breaching the damp proof course, allowing damp to enter the walls. Woolwich did not accept this and requested a specialist damp survey. This survey said that it was that the damp proof course had failed.

Woolwich have offered the mortgage on a 100% retention basis. Our solicitor has advised us not to go with this option as the vendor is dying, and this could cause issues if she dies between exchange and completion and we have already done the work. We would be concerned about it even if she wasn't dying.

According to the broker, the business manager at Woolwich has verbally agreed that they are being over cautious - apparently their refusal to budge relates to a reference to a structural engineer on the original valuation, despite the fact that no structural engineer has visited the property. The specialist damp company have verbally confirmed that it could be that the plaster has breached the damp proof course - they would need to remove skirting boards to be certain. Vendor has agreed to this but Woolwich aren't interested.

Does anyone have any suggestions for alternative lenders to look at? Very frustrated (and so are the vendors).

ACG

It will always come down to valuers comments for things like this, rather than the lender.

This is why your paying your broker, they should be on the phon doing the leg work for you. If you are using a fee free broker, then it may not be in their interest to spend time on the phone to lenders but you should be discussing it with them really.

Almo

We are using a fee free broker and we feel that he has given up. He has not suggested alternative lenders or anything else; whether this is because there are no other lenders who will touch us or because it's too much hassle for him I don't know, he hasn't given us much to go on.

We want to get the purchase over the line as we don't want to lose the house so if needs be we will change broker or actively suggest alternatives to him, at least.

ACG

You need to speak to your broker, ask him/her outright.

If they havnt given up, ask for timescales on when they will have a new lender. Ask what they have done to try to avoid this going forward - ie have they spoken to their account manager/underwriter to confirm on receipt of this report they would be happy to atleast consider it etc.

Its more a case of finding a lender who will accept you by the sounds of it.

If your broker isnt interested, fine. Find a new one. But its not a case of a lender accepting a property, it will be down to them accepting what the surveyor says about the property.

Almo

Thanks. I have sent a few questions to the broker and will take it from there.

I do understand that the lender acts on the surveyor's information. What I can't understand is that they are unwilling to reconsider even if we can get confirmation that the damp proof course has not been breached.

I'm frustrated at the valuation company too; the work is estimated as being sub 5k so I can't see why they state the property is not fit to lend on.

It feels like we are going round in circles with everyone hiding behind 'professional opinions' in writing, and saying totally different things verbally. Every report is full of caveats and unknowns and get out clauses.

ACG

Im surprised to be honest.
Woolwich underwriters are strange. Some things they can make a decision on, others they have to use whatever is in their book of underwriting decisions. Im a bit surprised that they can not use this report unless its written in such a way that keeps the surveyor out of grief even if they are wrong???

Im really not trying to parm you off, im always happy to help where i can but this is where your broker should be taking the stress from you and trying to resolve it. I would be surprised if there wasnt a way to get this sorted but without knowing your full details its dificult to say how many lenders are available...

Dont give up on woolwich yet, if your broker pulls their finger out it might be possible to overturn it.

Almo

Thanks, I appreciate all comments and I know it's hard to be constructive without knowing all the info. I do appreciate you taking the time to reply, I really do.

It just feels like we are stuck in a situation where everyone agrees it is a total over reaction but no one will put their neck on the line. I guess that's how society has sadly developed, people are understandably fearful of doing anything which might be used against them. I do get that.

Our broker... well, we will see what responses he gives me. I really feel like he has washed his hands of the whole saga.

As far as I can see our options are to walk away, to accept the retention against legal advice and our gut instinct, or to try and get the vendor to do the work. I imagine the vendor will be unwilling but even if it's done, I guess they will want to renegotiate the price upwards to reflect that so we will end up paying for work that may not need to be done - and half of the affected walls we want to know down anyway!

Partly I just need to vent I think.

ACG

The other way of looking at this is if you cant get a mortgage... will anyone else? This actually puts you in a strong position as they may not want to go through the whole process again.

wannahouse

can i ask why it matters if the vendor dies btwn exchange and completion?
you have a contract the house will be sold to you, so surely that has to be honoured even if she dies- wouldn't her relatives receive the proceeds of the sale?

Dave_Ham

Depending upon how bad the situation is, would think about getting an application done with a free valuation.

It would be incredibly difficult to get a lender to agree this in advance even with the reports you have, as previously stated all lenders will say subject to surveyor comments from the one they appoint.

Good luck