Nationwide changing terms mid application?

Luke88

Hi all,

We're FTB, and started a mortgage application with nationwide back towards the end of June. We had actually booked the appointment just before NW announced they were pulling their 90% LTV mortgages at that time, but honoured it for us because we already had it booked in and had an AIP.

They screwed up and updated their systems a week too early, so our application has followed some kind of manual process that has caused significant delays. It took them a week or 2 just to work out how to submit the application instead of just clicking a button basically.

We went with a 5yr fix at 2.24%, with a 33 year term. They did a physical valuation, and downvalued the property by 20k - which I wasn't really surprised by, especially in current climate. We renegotiated with the vendor and agreed on a new price. Then booked in another call with our NW mortgage consultant - because of the downvaluation, the amount they will lend us is 18k less than before so they needed to produce a new mortgage illustration. We decided to keep the same 33 year term, and the consultant said there was a chance the interest rate might increase in line with the current mortgages but relieved when that didn't happen and she gave us a new illustration at the same 2.24% rate. She didn't mention any potential issues with the 33 year term.

That was on Monday. They did yet another hard credit search (a third one for us), on Tuesday. This is sounding like a bad Craig David cover... today, Thursday, the consultant said the application had been rejected because NW are now only offering 90% LTV mortgages on a maximum of 25 year terms. But is working on getting the decision overturned due to us submitting the application way before they introduced that new rule.

Has anyone else had a similar problem or alternatively been lucky and had their offer through at the term they wanted above 25 years? If they give us the option I think we will go with 25 years reluctantly. We could luckily afford to do it but obviously it's going to leave less disposable income/savings and essentially put us under a bit more pressure financially - so we don't see it as being in our best interests.

It's incredibly annoying after working hard to save up as I'm sure plenty others on here have, and have the goalposts moved at this late stage in the process... We had a survey done on the property yesterday. The terms we previously agreed were easily affordable for us, being only a small amount above our current rent. It just defies logic to force us in to stretching ourselves. And NW will make less money in the long run as we'll pay less interest overall with a shorter term, so I'm not sure there's anything in it for them.

I also feel aggrieved because we paid a £999 product fee several weeks ago. I feel this should effectively secure the terms we agreed. The whole thing was just subject to the valuation, and obviously we're now borrowing less, so less risk for everyone. I'm struggling to comprehend just the complete lack of common sense.

Thrugelmir

Luke88 said:

 I'm struggling to comprehend just the complete lack of common sense.

The people you are directly dealing with can only follow the rules. As the commercial decisions will be made at board / risk management team level. When there's any sudden changes they will always be people caught in no mans land. Relax. You've paid the application fee and continued with the process of buying the same property. No reason why you should be declined.