Mortgage Offered... but now bank is investigating further?

kingstreet

Anything referred to the lender by the solicitor is referred to the surveyor who valued the property to establish if the new data affects the valuation or the security.

This takes two or three days to be actioned.

kingstreet

It may be worth investigating ability to insure the property at "standard terms" with no increased excesses as this may be a condition of lending.

manub

The searches that my solicitor did said that the property cannot be insured at Standard Terms because of the groundwater flooding risk. I instructed the report from the geologist that lowered this risk but I guess it will be up to the lender now, and I don't think I can do much. The lender is Halifax, and I'm going via a broker (which I haven't heard anything from recently, as the ball it's all rolling between solicitors and bank). Anything you know I may need to be aware of?

kingstreet

Yes, your ability to insure the property at standard terms, as I suggested. You have two issues, surveyor and insurer.

Solicitors know sweet fa about insuring a property. As long as the cover meets CML Handbook requirement 6.14.2 they tick their box and everyone is happy.

You need to be putting your valuation report and additional data in front of insurers and getting confirmation they will insure it and the terms offered.

If you cannot insure the property at standard terms, the lender may well deem the property unsuitable security for the mortgage advance.

Then, when it comes up later, you can stick your confirmation letter in front of the solicitor and enable another box to be ticked.

manub

Thanks kingstreet. I guess I have nothing else to do than wait now. I just hope they let me know ASAP. Luckily my mortgage advisors told me they've got in touch with the bank so I should know something sooner rather than later. It's just very stressful.

kingstreet

manub wrote: »

Thanks kingstreet. I guess I have nothing else to do than wait now

If you don't address the insurance issue now, you may be going through the same process again later, if you can't insure it in a way which is acceteptable to the lender.

manub

Well, I've got quotes online for my property building insurance, but as I don't know exchange dates yet I haven't applied. Prices are a bit higher than standard but I.e. direct line provided me a quote without mentioning anything about standard terms or things like that. What am I supposed to do?

manub

kingstreet wrote: »

If you don't address the insurance issue now, you may be going through the same process again later, if you can't insure it in a way which is acceteptable to the lender.

I spoken to my mortgage advisors - they are IFAs and they also provided me a quote for buildings insurance I accepted. Of course I will start that from exchange but they haven't mentioned anything regarding the standard terms.


I'm still amazed how do you come to know these things talking to people here and nobody of the professionals you talk to on a daily basis mentions something similar...

kingstreet

Until someone supplies the particular reports for the property in question to the insurer for consideration, a quote is worth about as much as the paper it's printed on.

I can do a quote for someone for life cover who has had a stroke, heart attack and cancer. Until the insurer knows the medical history and has issued acceptance terms, the quote means nothing.

You should "place" insurance cover on a sub-standard risk for insurance the same way you place a mortgage. By ensuring the full facts are disclosed as early as possible so no nasty surprises take place later.