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Mortgage refused due to house insurance
Track37
Posts: 6 Forumite
Hi we have just bought a house for £300000 and applied for a mortgage for £80000 through Nationwide. Nationwide granted the mortgage but when our solicitor applied for release of funds they refused. Their reason being is because we did not take out house insurance from the same company the previous owner used !:mad: even though we have got excellent house insurance which is probably more substantial than what the previous owner had! Anyone else heard of mortgages being refused at the last minute for this reason!!
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Comments
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No. Never come across this before.
The only reason that would be an issue is if there was a structural issue which meant only the existing insurer would continue to insure it.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks for the reply no structural issues at all Nationwide carried out a survey and the surveyor was happy and deemed the property to be safe for Nationwide to mortgage. The previous owner did not make any house insurance claims in the past 30 years he was living here. Currently left the situation with our solicitor, sheer frustration!!!0
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did you have house insurance in place at exchange of contracts?You're not your * could have not of * Debt not dept *0
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Yes house insurance was in place for exchange of contracts!0
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Are you sure thats the reason?
Some lenders want a policy which is indexed linked or unlimited amount of cover. I have known lenders to not release the funds unless that is in place - which is crazy as most cover £500k or £1million as blanket cover anyway.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Yes our solicitor sent us a copy of the letter from Nationwide stating that the reason they were not going to release the funds as we had not had our house insurance from the same company as the previous owner. Our solicitor was shocked as he had never heard of a mortgage not being released on these grounds!0
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I would be on the phone questioning that personally.
But just take out insurance with whoever they want. Once you have completed go to whoever you want.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
There has to be some reason. Anything unusual about the property?0
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Nothing unusual about property. Wish nationwide would give me a reason!!!!0
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