Mortgage Offer - Special Conditions

buglen

I have recently received a mortgage offer, it however has the following special condition attached:

"This Offer of Advance is made subject to all debts declared as being repaid by the Applicant(s), being settled in full on or prior to completion"

Is anyone able to clarify for me if this means all credit cards, loans, overdrafts, and interest free purchase agreements have to be paid in full before the mortgage will complete?

Funny_old_game

Everything in terms if unsecured debts you said you had on the application. You will have to clear them, if you can't the lender will need to update the application to reflect this thus knocking back your borrowing power.

buglen

Thanks for the speedy reply. This is why I am a little confused with the special condition. The mortgage lender already have details of all our unsecured debts, the amounts outstanding and the number of repayments left. This information was all provided during the application process, we passed the affordability checks and a mortgage has been offered. But to then expect all unsecured debt to be settled in full before the mortgage is advanced I honestly find absurd. It would have been far more efficient for them to simply decline the application based on the level of outstanding debt.

Funny_old_game

The level of debt isn't the issue its that at present they think the only debt you'll have on competition is the mortgage.

Someones made a boo boo along the way. Is it not possible to pay them off? The matter wont go away now so if it cant be addressed you wont complete. Are you a first time buyer or moving home?

amnblog

During the application process the lender has understood that as part of the transaction you were clearing all other debt before completion.

If that is not possible you need to have affordability re-checked based on the relevant debt staying active.

If it fits they will issue a new offer with the condition removed.

If it does not, it is back to the drawing board.

Was this case submitted direct to the lender or via a broker?

Thrugelmir

buglen wrote: »

But to then expect all unsecured debt to be settled in full before the mortgage is advanced I honestly find absurd.

Why? The lender if anything is acting in your best interests. Starting a mortgage with no savings to fall back on is simply asking for trouble.

buglen

Funny old game/Amnblog - Moving home, PX on a new build. The application was submitted via a broker, I will obviously be on the phone to them in the morning. I was always under the assumption the application was based on the fact that our unsecured debt would be staying active, the only part of the debt that I specifically stated would be cleared is some £400 on a credit card.

Thrugelmir - Your point is indeed very valid, we will have some savings in place before completion, probably around 3 months salary. But to me that somewhat misses the point, if I did have the money lying around to settle all unsecured debt I would not have done that anyway, I would have increased our deposit amount.

Funny_old_game

If its "all debts declared being repaid", and you only declared the £400 card to be cleared, you'll be ok.

Check with your broker though for 100% reassurance which ones they keyed as staying and which ONE is going.

PBA

Funny_old_game wrote: »

If its "all debts declared being repaid", and you only declared the £400 card to be cleared, you'll be ok.

Check with your broker though for 100% reassurance which ones they keyed as staying and which ONE is going.

I would suggest checking directly with the lender rather than the broker. Just in case the broker has deliberately misrepresented the figures.

buglen

I will check with the broker and provider, I sincerely hope they both give me the same answer. I had best get that card cleared too!

Funny_old_game

Sometimes you can't get confirmation direct if using a broker as they get input on systems people don't see. The brokers will confirm hopefully, who's the lender as that will help.