Nationwide reduced my offer from £100k to £69k

reddave

I had a mortgage offer of 100k from Nationwide that was good until October 2014 on a property I was buying at £137k

Because of a reduction in my own house price, I reduced my offer by 3k to £134k which the vendor accepted.

Nationwide have now inexplicably reduced my mortgage offer from £100k to £69k, saying that it had to be treated as a new application under the more stringent rules.

Yet, according to the mortgage offer, they originally wrote "We may withdraw the offer if there is a material change in the value of the property which is to secure the loan."

We have paid for their valuation (which for insurance purposes was £158k) but now they're disregarding their own valuation. I don't agree too, that the actual property has changed in value simply because the vendors are accepting £3k less.

As a result, I can no longer afford the property and have had to pull out and to add insult to injury, lose my valuation and arrangement fees to Nationwide.

Do you think it's worth pursuing a complaint with the financial ombudsman as they subscribe to the "Treating Customers Fairly" charter?

amnblog

If the change is due to the change in the rules on 26th April then Nationwide's hands would be tied.

Without knowing the case and the reason for the drop in lending it is difficult to assess if Nationwide would have any case to answer.

Thrugelmir

To clarify, when you say an offer. A formal offer or a DIP?

When was the offer first made?

kingstreet

A reduction in purchase price and/or mortgage makes it a material change and drags it into MMR. There's nothing inexplicable about it.

In which case, outgoings not previously taken into account may now be and that means what you can borrow has fallen.

Did you discuss the reduction with anyone before you went ahead and did it?

reddave

I don't see how a reduction in purchase price alters the actual valuation provided by the Nationwide. The house didn't drop in price in a few days.

It was a firm offer and no, I didn't consult anybody about offering a lower price.

Many thanks to everyone who took the time to respond.

kingstreet

I think this has nothing to do with valuation/price issues. The change has been triggered by the price reduction but is not directly responsible for the amount offered being lower.

What outgoings do you have which may have been ignored before MMR?

Try the Nationwide online calculator and input your income and outgoings according to the new requirements;-

http://www.nationwide-intermediary.co.uk/calculators/aff_calc

There are other lenders with more generous affordability models, so your sale and purchase are not necessarily doomed yet.