PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Got Mortgage Approved Just before COVID19 now manage a 5% Discount in the Property

Options
JJRome
JJRome Posts: 29 Forumite
Second Anniversary 10 Posts Name Dropper
Hello, We are buying our first property. We found a flat in London that we really like and basically offer to pay asking price, We applied for the mortgage (15% deposit) and received the approval in Early March just before Covid19. We tried our best to postpone any decision but seller state agent want us to proceed otherwise he will put the property back to the market.  So we reduced our initial offer by 5% and the seller just accepted. What is happening now? 

Re Apply for a new mortgage with HALIFAX. in which case they would fast track our application and keep a similar deal regarding interest and deposit?

or Do we need to start a new application all over again with current limitations like 20% down deposit ?

Comments

  • SpiderLegs
    SpiderLegs Posts: 1,914 Forumite
    1,000 Posts Second Anniversary Name Dropper
    You can’t just bank the rest. That would be fraud.
  • TN1984
    TN1984 Posts: 100 Forumite
    Second Anniversary 10 Posts Name Dropper
    You can't just keep everything the same and 'bank the rest'. Halifax will need to know the purchase price is different regardless of what you end up doing.
  • Your Solicitor/ Conveyancer has a "duty of care" to protect 2 parties, their Client (as in "you") and any Finance Company involved such as a Mortgage Company, therefore there would have to declare anything such as a difference in the house purchase value regardless of whether you end up borrowing more or not.


    Regards

    Daniel
  • JJRome
    JJRome Posts: 29 Forumite
    Second Anniversary 10 Posts Name Dropper
    THanks for the Replies, Now that is clear that I need to reapply. This will be a full  new application all over again or some sort of amendment? 
  • EmmyLou30
    EmmyLou30 Posts: 599 Forumite
    Tenth Anniversary 500 Posts
    edited 1 July 2020 at 12:52PM
    The bank will be told the purchase price and your LTV will change if you still wish to borrow the same amount of cash. There's no banking of the 'spare' cash. 

    Imagine a £100k house and you wanted to borrow £90k with a 10% deposit of £10k. All fine. Then you agree to buy the house for £90k instead.....the bank won't still let you have a £90k mortgage as that would be a 100% mortgage.
  • Chloe901
    Chloe901 Posts: 98 Forumite
    Part of the Furniture 10 Posts Name Dropper Combo Breaker
    JJRome said:
    THanks for the Replies, Now that is clear that I need to reapply. This will be a full  new application all over again or some sort of amendment? 
    It may depend on your lender. We are in the process of amending our mortgage offer with Natwest due to a renegotiated sale price - we specifically checked with our broker to make sure we would not need to start a whole new application. If you are using a broker I would speak with them to see what they think.

    Craft target 2020 - 17/20 projects complete
  • movilogo
    movilogo Posts: 3,235 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    With a renegotiated lower price, it is lot easier. All banks need to do just change the purchase price in their system.
    If price goes up, that's a whole new application then. 
    Happiness is buying an item and then not checking its price after a month to discover it was reduced further.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Sixth Anniversary 100 Posts
    edited 3 July 2020 at 4:10PM
    I have been involved in this situation. I was the buyer, and I got the price down after it became clear there were major works due to the block. Via the broker I told the bank the price had gone down by £4k, and I would be borrowing £4k less. It was approved without further fees, valuation etc.

    So as long as you still meet the lenders current criteria, I believe it should be easy enough to get the mortgage lowered. Just allow plenty of time, banks are suffering staff shortages due to Covid too.
  • bucksbloke
    bucksbloke Posts: 439 Forumite
    100 Posts First Anniversary Name Dropper
    movilogo said:
    With a renegotiated lower price, it is lot easier. All banks need to do just change the purchase price in their system.
    If price goes up, that's a whole new application then. 
    Depends on the bank, some banks will review the new price against the lending policy of today, not the date of the mortgage offer. Therefore if the maximum LTV for the bank has decreased, the buyer might need to find more money. A lot of people have been caught out doing this who had 95% mortgages only to find the bank was now only willing to lend 90% of the new figure. 
  • Chickereeeee
    Chickereeeee Posts: 1,286 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    We were selling, about to exchange and then lock down happened. When we could restart the process, we alll expected to complete the following week, but buyer wanted a couple of £k off. This added three weeks to the process, and we exchanged/completed with 2 hours to spare  before his mortgage offer expired, and we would have had to start  all over again....
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.8K Banking & Borrowing
  • 253K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.8K Work, Benefits & Business
  • 598.6K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 257.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.