New mortgage - utter shambles

poppajohn

Sorry for the AE, I'd like to keep the usual snipers away from this one.
I'll try to keep this as concise as possible:

Hoping to buy a new build valued at £210k, using help to buy (Scotland). Deposit £10.5k, help to buy £31.5k, mortgage £168k in total. Joint application, incomes of £34k and £29.5k (excl overtime etc.)

New build house completion date is mid December, mortgage advisor recommended Nationwide, all approved valuation correct etc. It transpires that the mortgage will expire mid November, only willing to extend to end November max.

Mortgage advisor advises that this situation "happens all the time" with new builds, all we'll need to do is apply to same lender about a month before house is built, shouldn't be an issue. (apart from us being homeless if it's then declined :eek:)

Spoke to housebuilder to ask if build date could be brought forward, they could not. Then further advised that solicitors for builder now refusing to proceed as (correctly) mortgage is not guaranteed to the date of entry.

We're now being advised that we have to apply for a mortgage with another lender who will lend past the entry date window.


If anyone could advise as to the following questions, I would be very grateful:

• Has the mortgage advisor been negligent? He knew that Nationwide only lend to 6months in the future, and that our entry date was beyond this. Then provided worse advice by simply advising to reapply a month before move in date.
• If we were to approach another lender, are we less likely to be approved bearing in mind that we've just been accepted in the last week with another provider?

Obviously rather upset that we were initially elated to have our agreement through for it only to be invalid due to the incompetence of our advisor.

Thanks

Trying_to_be_good

Not a legal opinion but:
1 - the mortgage adviser hasn't covered themselves in glory, but have you suffered a financial loss as a consequence? If you have, ask for them to pay that.
2 - why not reapply to Nationwide in a month's time, so the offer will be valid for the 6 months from then, upto the end of December? No reason to wait until a month before expected completion.

Lots of people buy off-plan and many mortgage offers aren't valid for that long.

kingstreet

As a newbuild specialist, we would not apply to Nationwide if the build timetable looks dubious, as we know of the six months + two weeks max offer period.

We would normally use Halifax for such cases as heir recently withdrawn products had 31/12/2016 drawdown deadlines and their new ones 31/03/2017.

They are also infinitely easier to extend with a simple valuation refresh and new product chosen method.

We have had build over-runs and have had two occasions where we had to reapply to Nationwide but these were after exchange of contracts and we had no problems.

We had one with Santander where the second applicant changed jobs and took a 50% pay cut and we ended up having to replace the case and proceed on applicant one alone, due to applicant two's reduced income and large credit commitments.

I would complain to the advisory firm about the premature submission of the Nationwide application, but if now applying to eg Halifax you shouldn't have any problems.

Thrugelmir

poppajohn wrote: »

Then further advised that solicitors for builder now refusing to proceed as (correctly) mortgage is not guaranteed to the date of entry.

That's an internal policy decision of the builder not a requirement of any kind. Not least that no mortgage is ever fully guaranteed. Any number of events could happen post exchange and prior to completion.

poppajohn

Trying_to_be_good wrote: »

Not a legal opinion but:
1 - the mortgage adviser hasn't covered themselves in glory, but have you suffered a financial loss as a consequence? If you have, ask for them to pay that.
2 - why not reapply to Nationwide in a month's time, so the offer will be valid for the 6 months from then, upto the end of December? No reason to wait until a month before expected completion.

Lots of people buy off-plan and many mortgage offers aren't valid for that long.

No financial loss, as such (although one could argue "loss of bargain" as the next best product apparently has a £1000 fee). I wasn't necessarily looking at a compensation angle, simply trying to judge if I should continue to have faith in the advisor.
We've been advised that we can't reapply to the same lender until the current offer is near expiry, so that kills that option - [STRIKE]EDIT: can anyone advise as to the accuracy of this? Mortgage advisor stated this, but if we can reapply whilst the mortgage is still valid in November, what's the difference in applying in, say, late June?[/STRIKE]
EDIT2: Mortgage offer specifically states that we cannot reapply during validity period of offer, advisor talking nonsense again.

kingstreet wrote: »

As a newbuild specialist, we would not apply to Nationwide if the build timetable looks dubious, as we know of the six months + two weeks max offer period.

I would complain to the advisory firm about the premature submission of the Nationwide application, but if now applying to eg Halifax you shouldn't have any problems.

That's why I'm losing faith in this advisor - their claim that this situation occurs "all the time with new builds" says that they have experience in the field, but then why go with the Nationwide at all if this is the case?

I don't really want to complain at this stage as I need to keep them on-side. The help-to-buy adds a further complications as it has its own deadline, and the number of lenders are quite limited.
Thanks for that info about the halifax, I'll need to check that they're talking about the same product - the March 2017 date is very reassuring.

poppajohn

Thrugelmir wrote: »

That's an internal policy decision of the builder not a requirement of any kind. Not least that no mortgage is ever fully guaranteed. Any number of events could happen post exchange and prior to completion.

I hate to disagree:
"The conveyancer must not exchange contract or conclude missives (Scotland) unless completion will take place within the validity period of the mortgage offer as the offer CANNOT be exended"....
Straight from the text of the mortgage agreement offer.

davidmcn

poppajohn wrote: »

I hate to disagree:
"The conveyancer must not exchange contract or conclude missives (Scotland) unless completion will take place within the validity period of the mortgage offer as the offer CANNOT be exended"....
Straight from the text of the mortgage agreement offer.

That's your conveyancer they're talking about, not the builder's - and in any event it's none of the Nationwide's business when you conclude missives, they're just trying to give you some sensible advice.

poppajohn

davidmcn wrote: »

That's your conveyancer they're talking about, not the builder's - and in any event it's none of the Nationwide's business when you conclude missives, they're just trying to give you some sensible advice.

Blonde moment there, sorry.
Still, as it stands, if I was able to proceed then couldn't get a mortgage again prior to build completion date, the builder could sue me, couldn't they?

Furious with the advisor, they should never have pushed for this mortgage when the dates simply won't work.

davidmcn

poppajohn wrote: »

I was able to proceed then couldn't get a mortgage again prior to build completion date, the builder could sue me, couldn't they?

That's right. Though still risks committing yourself this far in advance even with a mortgage offer which on the face of it appears to be valid (lenders reserve the right to withdraw offers, your circumstances might change, etc).

poppajohn

Can anyone advise whether I'd simply be able to cancel/reject/decline the Nationwide mortgage then simply re-apply in a months time? Is that a viable option?

dgtazzman

Having been down this road in the last year.

Nationwide mortgage. House should have been completed November 2015, now legal completion is set for second half of July 2016. Nationwide mortgage offer was valid till March, I reapplied, was initially (verbally) given an offer by Nationwide, but said offer never arrived in the post. Upon contacting them to ask where the offer was, my MA was told they had changed their lending criteria and I was now excluded as my income isn't paid in Sterling, so they had withdrawn the offer they had verbally agreed to issue. Just saying getting a new offer isn't a guarantee because they accepted you the first time round.

Luckily I secured a mortgage elsewhere now and the developer agreed in writing that if I was unable to secure a new mortgage offer, they would let me pull out without penalty.

Applying for another mortgage shouldn't hurt you too much. It will give you another search on your credit reports, but 1 or 2 extra searches are very unlikely to have any consequences. I submitted 3 mortgage applications in a month and one of the lenders actually did 3 searches on the same day, due to a glitch in their computer system, still ended up getting a mortgage offer without issue.