Mortgage lender asking for more money

Lisa8803

Hi,

My friend has exchanged contracts for a house purchase and her mortgage lender is now asking for additional funds ‘due to the pandemic’. This is a further £18,000! 

I am a first time buyer and in the middle of purchasing a flat. I have not exchanged contracts but I am worried as soon as I do, my mortgage lender will also ask me for additional funds.

My LTV is 65% so I am already putting a large deposit down and will not have the funds to put more as I will be a single occupier paying for everything form conveyancers, mortgage and including new appliances and furniture.

Any help or advise is appreciated

davidmcn

Do you mean your friend's lender actually withdrew a mortgage offer as they now want a lower LTV? If so do you know which lender and what the LTV percentage(s) were?

Lisa8803

She didn't mention any withdrawing of a mortgage, just that they want an additional £18,000. Unfortunately I do not know who the lender is or have asked their LTV. When she asked me if I had the same from my lender, I said no. She did say her LTV was less than mine so maybe that is the reason?
This is causing so much anxiety

[Deleted User]

Her circumstances will have so little in common with yours, it's not even worth giving it a second thought.

davidmcn

Lisa8803 said:

She didn't mention any withdrawing of a mortgage, just that they want an additional £18,000. Unfortunately I do not know who the lender is or have asked their LTV. When she asked me if I had the same from my lender, I said no. She did say her LTV was less than mine so maybe that is the reason?

I haven't heard of any lenders withdrawing mortgage offers they've already issued. Her LTV was even less than 65%? I know some lenders have tightened up the higher LTV mortgages (i.e. over 85%), but from what I've read here that only applies to new applications, not offers already issued.

Vestraun

You will be fine at 65%. Prices would need to come down by over a third before your bank would be at risk of losing money on your loan. It’s likely your friends LTV was 90/95% and as banks expect house prices to fall significantly this year they would want a larger deposit to protect their loan. 

Crashy_Time

Vestraun said:

You will be fine at 65%. Prices would need to come down by over a third before your bank would be at risk of losing money on your loan. It’s likely your friends LTV was 90/95% and as banks expect house prices to fall significantly this year they would want a larger deposit to protect their loan. 

Yes, that protects the bank but doesn`t protect the OP from paying too much. OP as many people will be in your friend`s position someone with your level of deposit should probably just wait and pick up a cheaper house at a later time?

ChloeManoey

I don't think the lender "asked for more money", it doesn't work like that. You don't pay any money to the lender. Sounds like vital details have been missed from your friend's story and there is more to it. 

Lisa8803

Hi All,
Thanks for your help so far. Yes her mortgage lender has asked for more money towards the deposit after the mortgage has been agreed. She is purchasing a larger house therefore her deposit and LTV isn't as great as mine as I am purchasing a smaller less value flat.
In a perfect world waiting for a better property as they will decrease in value would be great but I am not in that position so advise on waiting or renting is not needed, thank you.
I wanted to see if anyone else had this experience but so far no one else has. I will just have to get everything in order, once the details are back and the contracts are exchanged will have to pray they don't ask for a ridiculous additional amount.
Thanks again all

greatcrested

How long ago did she Exchange and what is her Completion date?

Story sounds unlikely to me.

( wouldn't surprise me if it turned out she's signed the contract but not Exchanged...)

Smodlet

Advise is a verb, advice is the (abstract) noun.

Mortgage lenders do not just up and demand another £18k out of the blue (unless you also have a loan with them, I guess)  I would suggest you have either misinterpreted whatever your acquaintance's issue is or you are not in possession of all the facts.  I would posit your "friend's" situation may have no relevance to your own, assuming your friend is not actually yourself.