Mortgage help six month rule

Linda160864

We’ve got an offer on our house and put in an offer on another property. However, the seller is a property investment company and is in he process of completing on 6 houses he is is buying from the developer, so as yet doesn’t actually own the property but missives have been exchanged (we are in Scotland) . We originally tried to buy a house from the developer however, these sold before we had an offer on our house. There was no other house available that we wanted so rang the estate agent to take our property off the market. That is when they said there was some houses coming on the market on the development we wanted to buy on originally. After a viewing we instructed our solicitor to put in the offer . That is where the problem has arisen , she mentioned the “six month rule” as the investment company won’t have owned the property for 6 months so we may have a problem getting our mortgage. We told the RBS right from the start the situation that the developer was selling to investment company & we were buying from the investor, the estate agent obviously also knew this and not once have either the bank or estate agent said it might be a problem getting a mortgage. Now we have incurred solicitor fees, a valuation fee and have a buyer who has gone into rented accommodation waiting on us purchasing this property . It now looks like RBS are going to decline our mortgage based on this rule . Does anyone know if this is the case ( RBS have gone back to underwriter to discuss so we are awaiting a decision) Any help would be much appreciated ( sorry post so long winded)

Linda160864

Our estate agent has said because they have done a “smart check” that means we will have no issue getting a mortgage....anyone any idea if this is correct?

amnblog

RBS are obviously the best place to answer the question.

Here are the rules for Nat West which I suspect will apply in your case and your situation is not listed.

Solicitors are required to disclose any transaction in the last six months and, if this happens, cases will be declined after offer unless the circumstances meet one of the following situations in which lending may be considered:

Customer funded purchase: when the customer has funded the purchase using their own funds or funds from a close family member and are now looking to set up a mortgage. The lending would be restricted to the lower of the original purchase price or valuation.
Bridging: residential mortgage applications where the customers required a bridging loan due to delays in selling the existing property, subject to normal underwriting. The previous property has now been sold and the applicants are looking for a mortgage on the new property with funds to be used to repay the bridging loan. Buy to let applications are not acceptable in this situation.
Inherited: a recently inherited property where the beneficiary wishes to release some of the equity for residential or buy to let purposes, or to buy the shares in the property inherited by others (e.g. siblings or joint beneficiaries). We will also consider lending where our customer wishes to purchase the property from a vendor who recently inherited the property.
Porting: where a fixed/discounted rate was ported to a new property but has now expired and the customer wants to remortgage within the 6 month period to gain a new rate. Proof of the rate roll off has to be obtained e.g. mortgage offer/rate roll off letter from the previous lender.
Repossessed property: where the vendor is the mortgage lender in possession i.e. the property has been repossessed within the last six months and is being sold by the mortgage lender or their agent. This does not include repossessed properties being purchased cheaply at auction and then sold on by a third party.
Part exchange: where the vendor is a large national house builder selling a property acquired under a part-exchange scheme.

Linda160864

Thanks amnblog . So do you think that the estate agent doing a smart check will make any difference to Rbs approving our mortgage.??? We are awaiting the Rbs decision but trying to get as much info as we can so we know where we stand .thanks again for your reply.

amnblog

If the Estate Agent does anything for the purchaser rather than the vendor or themselves it will be a first.