Advice needed - mortgage advance less than expected??

Harrogate24

Hi all,

First time poster here so bear with me!

We're currently waiting to exchange on a house.

Our mortgage is coming from the Halifax.

We had decided to add the £999 arrangement fee to our mortgage.
The house we are buying is £134000, we are getting a 5% mortgage so our deposit should be 5% of £134999 = £6750(?). This would mean we would get a mortgage advance of £127250 (£134000 - £6750)

This is the figure we have been working off, so when the completion statement came through from our solicitor prior to exchange we were shocked to see the advance stated as £126250.

I went to double check the mortgage offer which says the advance would be £126250 + £999.

If the completion statement is right then this means we will have to find another £999 from somewhere, which is a bit of a nightmare!

I've queried the mortgage with our solicitor, so we are waiting to hear back.

Can anyone help??

Thank you!

ToasterScheme

I don't see any error.

The mortgage company will add the £999 onto your account (the total that you owe back to them) but the fee is not paid across to your solicitor.

Why would your solicitor need this money? It's not paid to the seller so nothing to do with your solicitor really.

betmunch

You have added the fee to the purchase price which has put you on the back foot right away.

The advance should be £127300, which is 95% of the purchase price.

Do Halifax allow you to add the fee above 95%? I cant recall but I suspect not.

So you would have to put in a 5% deposit of £6700, then an additional £999 to allow them to add the fee without going above 95% LTV.

What has your mortgage advisor said?

ToasterScheme

Actually, maybe I do see the error.

When you apply for a mortgage, it is always for a fixed amount of £, not a percentage (although the bank obviously calculates a percentage for other purposes).

It would appear that you (or your broker) have only applied for a mortgage of £126250, or 94.2%, when you thought you were applying for the full 95%. This will be difficult to fix now.

This £999 is definitely a fee isn't it - not a cashback of some sort?

Harrogate24

Definitley an arrangement fee.

So basically we've added it to the mortgage when in fact we will still have to pay it because it brings us over the 95%?! What a pain.

I'd ring the Mortgage adviser but he's been absolutely useless about everything else (we naively used the Estate agents Adviser).

May have to suck it up and try and find £999. Luckily we're living with parents and I get paid next week.

Thanks for the replies

betmunch

Sounds to me like it was badly communicated that to add the fee the loan needed to be reduced, its usually only on the highest LTV of the lender, ie wouldnt have been a problem at 90% LTV.

Theres no question about you having to suck it up I'm afraid.

Maybe write a complaint about the poor service requesting that you have your fee waived, especially if hes been "useless about everything else" at least that would help with the £999 deficit.

Good Luck

enthusiasticsaver

Sometimes the arrangement fees on mortgages show as a separate advance and this would not necessarily be communicated to the solicitor as the fee is between you and your lender.

Thrugelmir

ToasterScheme wrote: »

I don't see any error.

The mortgage company will add the £999 onto your account (the total that you owe back to them) but the fee is not paid across to your solicitor.

Why would your solicitor need this money? It's not paid to the seller so nothing to do with your solicitor really.

Agree totally.

I went to double check the mortgage offer which says the advance would be £126250 + £999.

In black and white.