Mortgage declined following repairs required

klh1978

Can anyone please give any advice on a current situation we are experiencing. My husband and I had a mortgage agreed with Woolwich following a survey. We were due to complete last week and at the last minute we were asked to pay for a timber and damp survey. We had this done which indicated around £25,000 work. We knew the house was in need of repair so had actually accounted for most of this in our offer price. However, on advice of esurv (instructed by Woolwich), Woolwich have been told not to lend, despite us having a Loan to value rate of above 70%. We have spent 5 days trying to find out whether the mortgage would be agreed if vendor agreed to do work but no-one has been able to give us an answer so far. This would be our preferable solution but, if need be, would a guarantor be of any help? We have already proved we can afford the mortgage ourselves and I'm guessing that is where a guarantor would normally come in? Any advice would be extremely appreciated. Thank you.

Thrugelmir

klh1978 wrote: »

Woolwich have been told not to lend,

Woolwich will decide who lend to. No one else tells them what to do. The surveyors report and valuation will determine whether the property represents adequate security for the mortgage advance. With £25,000 of work to be undertaken then any mortgage lender will have concerns. As the purpose of mortgage lending is not to provide refurbishment finance.

klh1978

Thanks. The property has been valued at £475,000. We're purchasing it for £480,000 and putting down £150,000 deposit so would have thought that would have been enough equity for their risk. Obviously not. We have been told Woolwich underwriter basically goes on advice of esurv. Looking at ratings it looks like esurv are rated very poorly when people experience them through Woolwich. Guessing they are ultra cautious on their advice.

Thrugelmir

Rather than looking to blame someone. Better to focus on the facts.

Was the property valued at £475k subject to a professional timber and damp survey. Which you then had performed.

klh1978

I am not looking to blame anyone. In answer to your question, valuation was done with knowledge there would be extensive damp and timber repairs. I really wanted to know if anyone has been in similar situation (therefore having direct relevant advice), and also wanted advice on experience of guarantor help in such a situation.

ACG

You could try other lenders who will use a different firm of surveyors but there is no guarantee that would overcome it.

Another option would be to use a bridging loan (not cheap) that would allow you to complete and do the work, then draw down on the funds with woolwich subject to a revaluation being done and woolwich happy being the exit strategy to a bridge (some lenders do not like being the exit strategy).

Alternatively the vendor having the work done and then you paying for a re-inspection should also be fine.

klh1978

Thank you. We do have the funds available to complete the repairs first so hoping we can exchange contracts, split the costs of the work with them, then get the revaluation. Thanks again