Halifax Mortgage Offer Reduced

cocker100

Good evening,

We are looking for some advice as to our next best option.

We have recently applied for a mortgage on a new build property with Halifax via the builders nominated broker. We had to get pre approval for the mortgage before we could reserve our plot, which we did, and we received an agreement in principle with a maximum LTV of 85% and maximum borrowing of £188,000.

The house is £214,950 and we are putting down a 10% deposit, with the builder also giving an extra 5% deposit. We need a mortgage of £182,700 after inclusion of fees etc. The builder is accepting our current house in part exchange so we are unable to use the help to buy scheme, which is also why the builder is giving us the extra 5% so we can purchase with a standard mortgage.

Everything was looking fine, we paid our reservation fee, and the solicitors were instructed for the part ex and purchase. The broker visited us at home and we gave him all the details we needed for the full application. After reviewing our details, he was completely confident that the application would go through ok.

The application was made on Friday, but he did not get a decision, so chased them up yesterday. They have now come back saying that they will now only lend us 80% LTV which has put the whole purchase in jeopardy. The broker has said that it must be down to our credit score, however none of our details have changed since the DIP was given. He is therefore challenging the decision, as they had previously agreed to lend us 85% when the original credit scoring was done.

Now, I know the usual questions will come regarding deeper credit searches, previous addresses etc, but we declared everything to the broker prior to the initial DIP. We have had previous credit problems (defaults), however these have now all dropped off our CRA records, apart from an old Barclaycard which did not default and was put into arrangement to pay for over 5 years. When I realised this, I restarted contractual payments with them and for the past 2 years these have been showing as satisfactory. This is the only outstanding debt left from our previous credit problems. Also, around 3 years ago, we took out some payday loans to help boost our credit score. (Yeah I Know) These were only for a few days at a time and were all paid back early. At the time we never knew they could potentially go against us. Despite all this, the broker said that they shouldn't be a problem as they were historic and not within the past year.

All our payslips were given in and verified, and it also came out that we have underestimated our earnings, as I was allowed to use 100% of my overtime towards the loan. We have lived at our current house for 13 years, so there are no problems with previous addresses either. The broker thought we would sail straight through.

At a loss as to what to do next. We have put off moving for as long as possible to enable our credit to improve enough, but we outgrew our house years ago and need to move ASAP.

Do we stand any hope?

Landofwood

Halifax's lending criteria on New Build properties is as follows:


Property must be subject to one of the following building control and monitoring requirements:
Building Standards Indemnity Scheme from a warranty provider accepted by Lloyds Banking Group
Professional consultant where small, solely residential development of no more than 15 units – consultant must meet qualifying criteria
An acceptable guarantee from a development corporation or local authority where they are the vendor.
A final inspection is required to confirm completion of the new property unless covered by an acceptable new build warranty provider.
Barn conversions / converted properties are subject to a full retention pending completion of works and subject to new build criteria.
Maximum LTV on new build properties (houses and flats) is 80% (75% if the scheme type is a second home loan or buy to let).

Your broker doesn't know what he's doing.

cocker100

Thank you for replying.

The broker was instructed by the house builder Charles Church (Persimmon). He said that their max LTV on new builds was now 90%.

He has placed lots of mortgages for CC with Halifax.

To the best of my knowledge they have always known it was a newbuild. We actually got offered a better deal with Nat West but they wouldn't accept the builders deposit. Halifax knew we were getting an extra 5% from the builder, so they must have known it was a new build.

Landofwood

cocker100 wrote: »

Thank you for replying.

The broker was instructed by the house builder Charles Church (Persimmon). He said that their max LTV on new builds was now 90%.

He has placed lots of mortgages for CC with Halifax.

To the best of my knowledge they have always known it was a newbuild. We actually got offered a better deal with Nat West but they wouldn't accept the builders deposit. Halifax knew we were getting an extra 5% from the builder, so they must have known it was a new build.

As you do not specify 'New Build' on the AIP, you are reliant on your broker's knowledge of the lender's lending criteria.

You can read it for yourself here:

http://www.halifax-intermediaries.co.uk/criteria/mortgage/default.aspx

Expand the 'New Build' section.

Halifax are simply enforcing their own rules.

cocker100

Can't actually believe what I am reading!

Why would the builder place us with a broker who couldn't organise this correctly?

We had a broker in place prior to reserving, but CC were insistent on us using their's.

Are there any lenders who would offer a LTV of 85% on a new build? (With our previous credit)

Landofwood

cocker100 wrote: »

Can't actually believe what I am reading!

Why would the builder place us with a broker who couldn't organise a P*** u* i* a b******?

We had a broker in place prior to reserving, but CC were insistent on us using their's.

Are there any lenders who would offer a LTV of 85% on a new build? (With our previous credit)

I can tell you that Natwest also enforce 80% LTV on new builds, so if you had proceeded with them you would have had the same problem.

Unfortunately I don't know the lending criterias for other lenders inside out, and the mortgage brokers on here are not allowed to suggest a lender.

Have you looked at Help to Buy?

cocker100

We were initially looking at Help to Buy, but because we are part exchanging our house, it was no longer an option. They offered us the full market value so we snapped up their offer.

Charles Church also have a home change scheme where they assist you in selling your current house, but you cannot reserve a plot if you use this option.

You must be in a "proceedable position" in order to reserve. (i.e Mortgage in principle and buyer for current house).

If we revert to home change, then we will lose our plot and possibly our reservation fee.

Landofwood

Nationwide offer an 85% LTV on New Builds product, but rather than applying to random lenders I would recommend engaging with an independent whole of market mortgage broker.

Take your credit files with you.

The_Humph

Hello
May I ask who the broker is that CC recommended to use?

kingstreet

Halifax has a Top Twenty builders list where they will lend upto 95% and not the usual 80%. Persimmon/Charles Church/Westbury/Hillreed is on that list.

We get access on our Crest Nicholson cases too.

https://forums.moneysavingexpert.com/discussion/5237997

lovehackney

If it's any help, last year i got 85% LTV with Woolwich on a new build flat.