Mortgage nightmare-could Mortgage Packager be the solution?!

Mortgagesufferer

Hi all,
I had an offer from the council to purchase my flat under the right to buy (100K discount) however I live in an 8 storey block and there are only 6 flat sold in 32. Every single high street bank and other lenders refused to lend on the basis that there is a low ratio of owner occupiers and it is a high raise building so I was devastated. I finally gave up even though my credit scoring was excellent and I fulfilled all other lending criteria.
However one mortgage adviser (who had previously told me that there was no hope) came back to me saying that there is a mortgage packager who is willing to lend the money. They have seen the valuation report from Abbey stating that the issues are low ratio owner occupiers and high raise building but had still told the adviser that they could lend. He said that they have lent in the similar properties in the past.
Now I need to ask the council to make me another offer which could be slightly higher however this is not an issue as I have the money for the shortfall. This time I am paying an application fee and the valuation report myself, but even these do not matter if I get the mortgage. With the crazy increase in the prices I am absolutely certain that if I cannot buy it now I will never be in a position to buy again!!
I have sent all the documents to the adviser and I am just waiting for the underwriter's decision. If the underwriter grants the pre-valuation certificate, since the mortgage packager is aware of the issues with the flat do you think they could still refuse the mortgage on the same grounds (low ration + high raise)?! By the way the flat is in a prime location in central London.
I'm sorry for the long message but I have been so devastated the first time round that I cannot believe now I might still have a chance. Please let me know your thoughts.

Many thanks,

M

Voyager2002

Yes: the lender could still refuse the mortgage.

My main thought is that if you ever wanted to sell, your purchaser would face the same issues. So ...

kingstreet

A packager cannot give advice. It may help the broker find a lender, but the advice is given by the broker and it is up to them to justify the recommendation of a lender or product.

If the broker has been given a possible source, they should investigate and ensure you and the property fully meet the lender's criteria. You should ensure any fees are payable only when the broker is sure of acceptance of all the case details and if a broker fee is payable, this should be paid only at completion, so you can be sure of the broker's interest to the end of the process.

ACG

I do sometimes use packagers myself.
They not only help find lenders who would offer what you need, sometimes they have special arrangements with the lenders that you could not get anywhere else.

To give an example, i am doing a mortgage for a foreign national who does not live here. If i went direct to the lender myself i could not get the same deal.

The downside to packagers is that you are paying their fees on top of the brokers, but if its a means to an end then it can be worth it. The other issue is that as voyager says, you may have issues trying to sell it.... that being said, if everyone thought that way then nobody would ever get a mortgage on their flat and the issue would be there forever more.

Mortgagesufferer

Thank you for your feedback, much appreciated! I do not intend to sell so that does not concern me.
The mortgage adviser informed me that the lender has previously lent on similar properties and the way I see it (correct me if I am wrong) is that unless he had some considerable assurance that I could get the mortgage he would not have approached me for the second time. Or is this some wishful thinking on my part?!!
Cheers,

M

cattie

I'm puzzled as to why you would want to buy a flat that you know is only ever going to be sold to cash purchasers in the future?

Also, are you aware of the potential for huge bills in the future for the service charges, maintenance etc?

I know it must appear tempting to be offered a £100k discount, but on a property with a very limited appeal to any potential buyer, that is bound to be fraught with financial issues somewhere down the line, it isn't really such a good deal. The lack of other owner occupiers would concern me greatly.

I know you say you don't ever want to sell, but exactly what is the benefit in owning then? Much better to continue to pay your heavily subsidized rent to the council, knowing that all repairs & maintenance will be their sole responsibility & no financial input required from you.

Mortgagesufferer

Hi cattie,

The reason is that I will rent it out in a few years and given the location I could get easily double of the mortgage.
Thanks,

M

gjchester

Mortgagesufferer wrote: »

Hi cattie,

The reason is that I will rent it out in a few years and given the location I could get easily double of the mortgage.
Thanks,

M

Renting out will mean informing the lender and at the very minimum they WILL increase the rate a few % points, they could refuse permission to let.


You may want to check if they will allow it to be rented before committing yourself, or if there are any council or building covenants that may cause you issues with renting, especially if it may be hard to sell, or the golden goose may become an albatross.


The mortgage advisor gets paid if you take out a deal, they must think its viable, but that does not means it may be the best deal for you, especially if you have a such limited choice of deals.

ACG

gjchester wrote: »

Renting out will mean informing the lender and at the very minimum they WILL increase the rate a few % points, they could refuse permission to let.
That is not the case. They MAY increase the rate, they MAY charge an annual or 1 off fee, they MAY do nothing at all.

You may want to check if they will allow it to be rented before committing yourself, or if there are any council or building covenants that may cause you issues with renting, especially if it may be hard to sell, or the golden goose may become an albatross.


The mortgage advisor gets paid if you take out a deal, they must think its viable, but that does not means it may be the best deal for you, especially if you have a such limited choice of deals.
Having a limited number of options does not mean it is not the best option for the OP, it just means its not the best option on the market.

Sorry to be fussy, but what you are saying is not correct and can impact on a persons decision.

Mortgagesufferer

Thank you all for the advice especially to ACG, however I have checked already with the council and I will be able to rent it out the next day if I wish!! Also even in the unlikely event that the rate may increase I will still be on the winning side so the the golden goose will remain a golden goose if I can get the mortgage.
Based on the information I have provided and since you seem to have lots of experience in this area, what do you think my chances are of getting it?
Many thanks in advance.

M

GMS

The council saying you can let it is only one part of the puzzle. The lender needs to agree.

If they don't then you can't let it.