Mortgage offer still on ice pending valuation

kazzamunga

Hi. You might remember me from earlier in the year, posting about any one of my many previous properties that have fallen through for one reason or another - or in fact my flat that was put on the market last August and still hasn't quite made it over the final hurdle. New questions, guys - about house number four: Anyone know what Virgin Money are playing at?

The govt came out quite clearly saying that it was OK for people to go back to work, and most of us are just struggling along, but for some reason valuation surveyors are in a special category all of their own and don't have to go back to work? Virgin Money have not changed their stance at all since last Sunday's announcements, so here I am in limbo.

I put in an offer on a (vacant, ex-rental) house before the lockdown and applied for a 90% LTV mortgage. Got through the AIP easily, and then....lockdown. Not only are Virgin Money refusing to update their information about when their mortgage offers might go through (it's a safety issue, apparently - the risk of finding covid in a house that's been empty since the start of the year must be sky-high), but now they are also saying that because so much time has lapsed, I have to provide my last two months' payslips. And that's where the fun begins - my company is currently paying all its hard-working staff 75% of their wages as a 'temporary measure to build resilience in the company's finances'.

Does anyone know if I will be penalised if by some freak of nature the valuation survey does actually happen and I do submit my payslips? Or is that the end of house number four?

csgohan4

everything will be put through their affordability criteria and they can only go on what you can provide now, which is 75% wages. 

kazzamunga

csgohan4 said:

everything will be put through their affordability criteria and they can only go on what you can provide now, which is 75% wages. 

Well isn't that just swell. 

AilieG01

We had an offer accepted on a house at the end of March and applied to Santander. All was ok until my husband and I were both furloughed. So application was then declined. Had to apply to NatWest and they are only taking our furlough wages into account. LTV is 75% so they could instruct a desktop valuation but haven’t heard anything since. All been a bit of a pain tbh 

kazzamunga

Can't believe that's allowed to happen, @AilieG01. Someone needs to sort the banks out. Obviously i know that having a 90% LTV is counting against me but I wanted some cash spare to make some changes!

kazzamunga

Couldn't make it up to 75% anyway, and apparently Virgin Money need a 35% deposit on all new applications, so forget that. 

[Deleted User]

Even if you had a mortgage offer you would be bound to certain conditions and one of them is updating the lender between offer and completion if your financial situation changed.  

Virgin need 35% for new applications but yours isnt new so would still go through at 10% if you hadnt been given a pay cut. 

None of this is the banks fault. Everyone follows government advice the best they can.  The surveyors didnt go to the empty property because it was deemed to be non-essential travel and that hasnt been allowed up until recently. 

kazzamunga

Mate - the banks are to blame for literally everything, but that's another story. But how is it my fault if I've had a temporary pay cut, for topical reasons! Surely banks should be making allowances for that, just like we're making allowances for their own sloth-like response? 

[Deleted User]

I didnt say it was your fault either.  Ive got loads of clients who have taken or been given pay cuts at the moment.  Its just the way it is unfortunately.  

If your pay cut has an end date on it then you could probably get it through but if its open ended then they cant base affordability on anything other than whats on the payslip.   If the pay never returns to previous then they will have lent too much based on your actual income.  They all have affordability assessments signed off with the regulator, to lend money based on an income you can no longer evidence would be irresponsible and get them in to a lot of bother.

I am no general fan of banks, been around for enough years to see all sorts of nonsense but with this Covid situation i cant see how the banks can be blamed.   They have massively increased the risk they are exposed to by increasing the limits they allow desktop surveys to go to.  The fact that your property didnt qualify for a desktop survey isnt their fault and the surveyors travelling to empty properties or not is something they have zero control over.  The surveyors work for different companies, not for the lender. 

If you say its temporary then do you have anything to show it will return at a certain date?  If so then argue your case at the lender and escalate as far as you can.  If its open ended then you might just have to wait until it goes back up or find another lender who will lend you enough on the reduced income

csgohan4

kazzamunga said:

Mate - the banks are to blame for literally everything, but that's another story. But how is it my fault if I've had a temporary pay cut, for topical reasons! Surely banks should be making allowances for that, just like we're making allowances for their own sloth-like response? 

Blame Covid 19, not the banks, they were lending fine before that. In fact why not blame the government for their tighter regulations and hence based on affordability which was brought about from the 2008 crash and the sub prime market. 

Lenders are accountable more than ever and if you complained in 10 years time that they gave you a mortgage despite cutting wages to 75% they will be asked why they gave you mortgage as you may not have afforded it.  You can't have your cake and eat it. Lenders have to be strict and ensure they lend sustainably for both parties

kazzamunga

Blame Covid 19, not the banks, they were lending fine before that. In fact why not blame the government for their tighter regulations and hence based on affordability which was brought about from the 2008 crash and the sub prime market. 

Lenders are accountable more than ever and if you complained in 10 years time that they gave you a mortgage despite cutting wages to 75% they will be asked why they gave you mortgage as you may not have afforded it.  You can't have your cake and eat it. Lenders have to be strict and ensure they lend sustainably for both parties

Actually I disagree, because directly before Covid 19 I got turned down because a house that had sold several times with no problems in the last 20 years has suddenly become unmortgageable for being too close to a sleepy old socialist club in a sleepy little Yorkshire village, defined by the valuer as 'a nightclub'. So yeah, I've got previous with this. Their algorithms have gone mad in the last few years.

Also, your comment that I want to 'have my cake and eat it' is exactly the kind of annoying assumption that bolsters the banks and counts against ordinary people just trying to get a leg up. I don't have any intention of complaining, now or in ten years' time, about the amount I borrow. To give an idea of just how far within my comfort zone the mortgage amount is, I am on 75% wages and I am still managing to save twice the amount of the mortgage every month, and I and my partner are going to pay half each. So in fact, the amount I will have to pay on my supposedly risky mortgage, is a quarter of what I'm currently saving, after my monthly expenses.

So yeah, I think it's a bit of overkill, and I don't think I'm a risk, and I've never defaulted on previous mortgages or given the bank any cause for concern. And I have a perfect credit rating. So I do object to assumptions being made based on other people who may be more reckless with their money, and by default being lumped in with them.