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

JJRome

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 ?

SpiderLegs

You can’t just bank the rest. That would be fraud.

TN1984

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.

collinsd70

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

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

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

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.

movilogo

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. 

[Deleted User]

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

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

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....