Last minute worries with Solicitor query

pulimiharish

I just got struck at the final stages of my Mortgage due to my Solicitors query.

I'm an IT Contractor and my Mortgage application is accepted by Halifax so I have received the offer last week and we are about to exchange the contracts this week but the Solicitors found a Directors loan in my account and sent a query to Halifax. But I'm not using that Directors loan for paying the deposit. I have £55K in my account and the deposit+stamp duty etc. fees amount to £45K and I have the directors loan for £10K.

I dont understand why my solicitor has the problem when I have sufficient funds in my account for the deposit. Why are they raising this after the Mortgage is offered and we are about to exchange the contracts. My worry is that they have sent the query to Halifax last week and still they haven't received anything back. Is there a chance that Halifax would take their offer back due to the Directors loan? I have told the Solicitors that I can re-pay the Directors loan right now but they said they cant take back the query now. Halifax already had my bank statements so wouldn't they have checked the directors loan already before offering my mortgage.

We need to vacate our current rented house in the next 20 days. Plus we have already spent around £2500 for mortgage fees, valuation fees, buildings insurance etc. Dont know what to do if everything falls over in the last minute.

I still dont understand why this was not flagged up when we started the process? Do I need to be worried and look for a backup plan or my situation is looking a bit safe? Appreciate any information in this regards.

NOTE: The Director's loan is an interest free loan that has to be paid back to the limited company within 9 months after the year end returns (gov.uk/directors-loans/overview]). In my case it is April 2016 and hence I am planning to clear it in the next few months, its equivalent to taking the dividends in advance.

chanz4

they may effect lending, or see it as an undisclosed loan

Thrugelmir

pulimiharish wrote: »

I dont understand why my solicitor has the problem when I have sufficient funds in my account for the deposit.

The solicitor works for the lender as well as you. On behalf of the lender they verify the source of the deposit. They are merely informing the lender what the have been asked to. Up to the lender whether the source of the deposit is acceptable or not.

Landofwood

You're supposed to declare you outstanding credit arrangements to the lender. You can't hide things and hope they don't pick them up.

pulimiharish

Sorry for not being clear: the deposit is NOT coming from the Director's loan, I have enough funds for the deposit (£45000) and I have a directors loan (£10000) in my account (Total balance: £55000). I didn't hide anything from Halifax as Halifax has checked all my bank statements and credit checks and then only they offered the mortgage.

Thrugelmir

What did your solicitor say precisely? They are best placed to explain their actions.

Landofwood

pulimiharish wrote: »

Sorry for not being clear: the deposit is NOT coming from the Director's loan, I have enough funds for the deposit (£45000) and I have a directors loan (£10000) in my account (Total balance: £55000). I didn't hide anything from Halifax as Halifax has checked all my bank statements and credit checks and then only they offered the mortgage.

So on the application form, there's a section where you list loans and credit cards, and their balances.

Did you list the loan on the form?

pulimiharish

Landofwood wrote: »

So on the application form, there's a section where you list loans and credit cards, and their balances.

Did you list the loan on the form?

Not sure as my Mortgage Advisor filled up that form and he is currently on holiday.

Landofwood

pulimiharish wrote: »

Not sure as my Mortgage Advisor filled up that form and he is currently on holiday.

You have to sign/agree with the content on the application form.

This is all starting to become clearer.

You didn't declare the loan.

GRBWA

Do solicitors see the application form as well as the offer?

Sheep

Landofwood I am applying for a mortgage and didnt have to sign anything regarding the content that my broker disclosed on the application form.

Why do you have to be so rude to people? It wasnt long ago since you were apologising on this forum.