Mortgage Declined Due to 'Loan"

manno_1988

Hi there, hope someone can offer some advice.

We recently applied for a mortgage through Halifax. Our broker went through everything. All was going fine. Valuation was about to happen when Halifax decided to do a full audit. This went okay, until last minute they then pulled from the deal as they said they have "evidence of a loan".

So the story. Our uncle has GIFTED us £12,000 to go towards the deposit. He has written 2 letters to state that it is a gift and that we won't have to pay him back.

The bad news - when he transferred the money to us he put reference as "loan", something which he done for his own benefit. Halifax have taken this as sold, hard evidence that they are loaning us the money and have declined it. The broker has said he has tried to argue the case but they are not budging.

Is there anything I can do? Is there a way I can challenge Halifax? As we are purchasing a house on Discount Market Sale we don't have many options in terms of lenders.

Any help or advice will be fantastic.

Simon.

BJV

Gutted for you. It sounds like that Halifax have made a decision as is their right. If they will not change their mind after 2 letters I doubt anything is going to get them to. I would speak to your broker now and get him to apply elsewhere.

Thrugelmir

manno_1988 wrote: »

The bad news - when he transferred the money to us he put reference as "loan", something which he done for his own benefit.

The term "loan" is very distinct and unambiguous. What's the benefit ?

Financial relationships are built on trust. Lenders are naturally cautious. Any suspicions will therefore generate doubt.

MortgageMamma

Try another lender, many lenders are more flexible when it comes to gifted deposits in the form of loans, you broker should know which ones.

Mortgage_724433

Before trying another lender I would ask your mortgage adviser to thoroughly assess the lenders position on this before proceeding with an application. The last thing you want is multiple declined applications, although there should be several lenders that are accepting of this situation if packaged appropriately.

Boredatwrork

I know this is a bit left field, but have you explored the idea of paying off the Loan. i.e trasnferring the money back. If you can provide evidence of this, it might count as something?

Surely if its a loan, the question is what terms are in place to pay it back? If the issue is just a 'computer says no' tick in a box, there may be a work around.

Beyond that Create merry hell at halifax at halifax, just keep asking for the next manager up the chain, if its really is a !!!! up that simple, someone will have authority to fix it.

tomtontom

Boredatwrork wrote: »

I know this is a bit left field, but have you explored the idea of paying off the Loan. i.e trasnferring the money back. If you can provide evidence of this, it might count as something?

Surely if its a loan, the question is what terms are in place to pay it back? If the issue is just a 'computer says no' tick in a box, there may be a work around.

Beyond that Create merry hell at halifax at halifax, just keep asking for the next manager up the chain, if its really is a !!!! up that simple, someone will have authority to fix it.

Creating merry hell at the people you are asking to lend you thousands of pounds is pretty poor advice, especially when the mistake is on the part of the uncle, not the bank.

Boredatwrork

If its a case of the solictor being a bit useless, or the bank themselves not putting in much effort (both of which happen time and time again), and in reality its just something that can be proven to be as a error (which it looks to be). Then why not give it a go.
If the bloke from halifax on the end of the phone agrees its ridiculous, (which from what we are told by the details given), then chances are it ultimately might just be a case of getting the correct signature from the right person. Havign worked in a bank for a number of years, my experience tells me, most things of this nature can be worked out with a bit of pressure, as long as you come across fair and reasonable. 'Computer says no' is a common complaint in big structured organisations.

Whats the worst case scenario, that they could decline the offer....I think that might have already happened. What have they got to lose
They have it in writing from the lender stating it was an admin error, what else do they need. Nothing is set in stone.

David_White

Unfortunately I have seen it happen before.

Worst case scenario is that you'll need to find another lender... preferably one that won't require bank statements.

amnblog

In short the underwriter at Halifax does not believe it is a 'true gift' and frankly has every reason to be suspicious. Why would someone mark a 'gift' as a 'loan' 'for his own reasons'?


Finding another lender on DM Sale won't be easy. I am not sure there is one.


Back to your Broker.


I am not confident you will find an answer on here as most Brokers have never heard of a DMS much less the layperson.

AnotherJoe

The additional problem you now have is that this is stuck in your bank statement for the next 3 months as "loan" whatever Uncle says. Why On Earth did he ... oh never mind......

Some lenders (Santander for example) will accept this as long as Uncle writes a letter stating there is no need to repay until house is sold or mortgage redeemed.