Got finance before completion of house...

Sugnid

Hi,

First time buyer along with my wife and everything is done bar the exchange of contracts/completion.

Given we’re a couple of months out, I did a google search in relation to distance between mortgage offer and completion, read these forums and noticed everyone talking about not getting credit before they’ve gotten the keys, etc.

Cutting to the chase, in our naivety, we were unaware that any further checks might happen nearer the time and ended up getting finance 12 days ago via Barclays Finance to get a few things before the move.

Naturally I’m devastated as had I/we known this, I/we’d have never gone through with it knowing it potentially could wreck our move. Appreciate that this is a very painful life lesson to have learnt with potentially fatal consequences..

So while I know the credit check will show up on my record now either way, should I just cancel the finance while I’m still in the 14 day grace period so it’s not hanging over us?

Would be great to get some advice.

Thanks.

cooltt

Sugnid wrote: »

Hi,


So while I know the credit check will show up on my record now either way, should I just cancel the finance while I’m still in the 14 day grace period so it’s not hanging over us?

Would be great to get some advice.

Thanks.

It's pointless to cancel, it's the hard credit search your mortgage lender will see on your file not the company you've taken credit with or how much etc. There's nothing you can do to fix this now except tell them the truth if they ask.

Don't panic about the lender finding out, they know full well people get a little excited when buying a house. If there were multiple searches for credit then they may act, if it's just one they'll probably say nothing and that's assuming they will do a further search.

SG27

I would say yes cancel it.

The lender will do another search before completion and they will see the amount of credit you have taken out. If you cancel, the search will show up but at least you wont have any additional credit liability.

cooltt

SG27 wrote: »

I would say yes cancel it.

The lender will do another search before completion and they will see the amount of credit you have taken out. If you cancel, the search will show up but at least you wont have any additional credit liability.

As i mentioned pointless cancelling, Barclays finance is not revolving credit.


You know the lender do you? and they told you they're going to do another search before completion?



It's in the T&C's of a mortgage app yes, however only 45% of lenders carryout a further search prior to completion and only then if the offer is high risk.

bigstevex

How tight was your affordability?

SG27

cooltt wrote: »

As i mentioned pointless cancelling, Barclays finance is not revolving credit.


You know the lender do you? and they told you they're going to do another search before completion?



It's in the T&C's of a mortgage app yes, however only 45% of lenders carryout a further search prior to completion and only then if the offer is high risk.

So you would take the risk would you? On the 55% chance that they wont check? (Where did you get that figure from?)

If they do check they will see the amount borrowed and this may affect affordability.

Sugnid, post this on the mortgages board, there will be someone there who csn give you some solid advice.

Sugnid

Thank you for the responses so far.

SG27 - I've posted this in the section you suggested.

In terms of affordability - we're getting a share to buy property so I don't know if that makes us more high risk or not. Again, we're just guilty of not being up to speed with certain elements of this so as mentioned, we will potentially pay the price for not doing our due diligence.

kingstreet

cooltt wrote: »

however only 45% of lenders carryout a further search prior to completion and only then if the offer is high risk.

Do you have a source for that?

I'd be interested to read more.

kingstreet

We do have two potential issues here.

The first is a hard credit search affecting the applicant's "score" with the mortgage lender. The other is the impact on affordability of a new credit commitment.

In a worst-case scenario, an offer could be withdrawn due to score no longer meeting threshold. Best-case in he event of the lender discovering this could result in the application having to be re-underwritten and re-assessed for affordability.

It may not be picked up at all. Who knows?

People tell us the process is stressful enough without potentially making it worse for yourself!

Cakeguts

If you think your mortgage offer might reduce you could still pull out of the purchase because you haven't yet exchanged contracts.



After the move you still have to save money in order to pay for repairs to the house. As a home owner you can't really afford to buy things on finance you have got to be able to pay the mortgage or you will lose the house. This means paying the mortgage if you lose your job so you have to have savings.

Sugnid

As I stated, had we of known (or did the proper research I think is the better term) of the additional potential checks nearer completion, we wouldn't have done it so don't think we're not kicking ourselves - especially myself. So yes, I/we have a very stressful two months coming up.

I'm going to call up and see if it can be cancelled and see what happens.