Anyone had a similar situation?

Cuddlybearman

Hi all - just hoping that someone may have had a similar situation as me and could offer some insight.
I accepted an offer on my property about 5 weeks ago from a buyer who is taking a buy-to-let mortgage and he was very upfront. Showed me his emails from Nationwide, his proof of his deposit, probably more than he needed to but appreciated the transparency. Anyway he has been keeping my EA updated almost daily on his progress with the bank and his solicitor - paid for a survey - paid his solicitor for searches etc etc. 5 weeks later on and still no mortgage offer he today said that he was fed up with waiting for nationwide and they were back tracking on his potential rental values and wanted more deposit so he has now gone to Satander for the mortgage instead.

My worry is that would that really make a difference? Would Satander be more likely to do better than Nationwide or dont they all go off the same "hymn sheet" when it comes to this? 

I have a bit of a worry that he's just been simply declined for another reason (credit, source of funds etc) and is panicking and now trying a new bank rather than coming clean and in the meantime more time is passing. His solicitor has completed their searches - mine is nearly done on the place i am buying, and my seller is waiting to get the paperwork done (i'm the only person in the  chain btw). I've never dealt with anyone having a buy-to-let mortgage and i'm wondering if this is a normal thing?

Thanks

Drawingaline

We had a buyer who had a large BTL portfolio. After three months they pulled out due to not being able to secure funding. It would appear that many lenders are really scaling back mortgage products and their broker dropped a clanger by applying to a provider they already had mortgages with without checking the new criteria so they were declined. And then did the same with the second lender 🤦 

So after three months we are ready to exchange in our purchase and have had to find a new buyer for ours. It's not been fun!

Crashy_Time

I doubt banks are in a hurry to lend on BTL at the moment. Find another buyer IMO.

princeofpounds

No, lenders do not sing from the same hymn sheet. They can be quite similar in some areas, but there can be plenty of differences too.

Whilst you can never be 100% sure of the truth, this is a fairly credible explanation. If often happens that a specific lender may quibble over details like this, and asking for a lower LTV ratio (i.e. a higher equity deposit from your buyer) is exactly the sort of thing they would do if it was a question over something like the amount of rent he may receive.

Of course it's always possible that he is lying, that there is a fundamental problem, AND he is being deluded that another lender will accept him. But that is far less likely.

The fact that he has progressed with other aspects of the deal, incurred expenses and is communicating well shows that he is probably working in good faith.

AskAsk

different banks will have different lending criteria.  some are more cautious than others, so nationwide not approving the mortgage amount will not automatically mean santander will do the same.  what may be important is the shortfall amount as that being too big may not fall close enough if the buyer approach another bank.

you could give him a couple more weeks to raise the money from santander and see whether he gets a more favourable offer.  as someone has said, BLT is probably considered risk by the banks at the moment because of covid 19.

Crashy_Time

AskAsk said:

different banks will have different lending criteria.  some are more cautious than others, so nationwide not approving the mortgage amount will not automatically mean santander will do the same.  what may be important is the shortfall amount as that being too big may not fall close enough if the buyer approach another bank.

you could give him a couple more weeks to raise the money from santander and see whether he gets a more favourable offer.  as someone has said, BLT is probably considered risk by the banks at the moment because of covid 19.

We are not that bad yet, I`m sure people are doing due diligence on their counter tops etc. before they open?

Cuddlybearman

Drawingaline said:

We had a buyer who had a large BTL portfolio. After three months they pulled out due to not being able to secure funding. It would appear that many lenders are really scaling back mortgage products and their broker dropped a clanger by applying to a provider they already had mortgages with without checking the new criteria so they were declined. And then did the same with the second lender 🤦 

So after three months we are ready to exchange in our purchase and have had to find a new buyer for ours. It's not been fun!

Ok well luckily this is his first BTL and he's dealing direct with the bank. 
Like i said he was very very upfront with everything he had done before hand - just strange that the bank would all of a sudden start changing their mind about rental incomes when with the underwriters............although not entirely surprising

Cuddlybearman

AskAsk said:

different banks will have different lending criteria.  some are more cautious than others, so nationwide not approving the mortgage amount will not automatically mean santander will do the same.  what may be important is the shortfall amount as that being too big may not fall close enough if the buyer approach another bank.

you could give him a couple more weeks to raise the money from santander and see whether he gets a more favourable offer.  as someone has said, BLT is probably considered risk by the banks at the moment because of covid 19.

Well he said that Satander have gone through all his numbers with him and said should be ok (should...) and have told him that they commit to a valuation done by 9th Dec (although will probably be the same woman who did it for Nationwide....if they even bother coming out at all) and committed to a decision in 10-14 days.

Like i said they guy is very upfront and pro-active. I hope he's just not been too optimistic from the very start (or am i being over pessimistic lol)

Crashy_Time

Cuddlybearman said:

Drawingaline said:

We had a buyer who had a large BTL portfolio. After three months they pulled out due to not being able to secure funding. It would appear that many lenders are really scaling back mortgage products and their broker dropped a clanger by applying to a provider they already had mortgages with without checking the new criteria so they were declined. And then did the same with the second lender 🤦 

So after three months we are ready to exchange in our purchase and have had to find a new buyer for ours. It's not been fun!

Ok well luckily this is his first BTL and he's dealing direct with the bank. 
Like i said he was very very upfront with everything he had done before hand - just strange that the bank would all of a sudden start changing their mind about rental incomes when with the underwriters............although not entirely surprising

Not really, the recent government announcements are not very pro high rents going forward? TBH anyone keen to purchase BTL at this point is probably a red flag in itself!

AskAsk

Cuddlybearman said:

AskAsk said:

different banks will have different lending criteria.  some are more cautious than others, so nationwide not approving the mortgage amount will not automatically mean santander will do the same.  what may be important is the shortfall amount as that being too big may not fall close enough if the buyer approach another bank.

you could give him a couple more weeks to raise the money from santander and see whether he gets a more favourable offer.  as someone has said, BLT is probably considered risk by the banks at the moment because of covid 19.

Well he said that Satander have gone through all his numbers with him and said should be ok (should...) and have told him that they commit to a valuation done by 9th Dec (although will probably be the same woman who did it for Nationwide....if they even bother coming out at all) and committed to a decision in 10-14 days.

Like i said they guy is very upfront and pro-active. I hope he's just not been too optimistic from the very start (or am i being over pessimistic lol)

i think santander are a bit more flexible with risk than nationwide.  nationwide is a very cautious bank, so i do think he will get a better chance with santander.

i doubt they will be using the same surveyor as each bank will have their own preferred surveyor.  the mortgage value very much depends on the achievable rental income.  rents have fallen because of covid 19 so this will have a downward pressure on the mortgage offered.  if he fails with santander, then it would time to put the property back on the market and sell to him if he does manage to raise capital, otherwise hope that someone else will come along.

Cuddlybearman

AskAsk said:

Cuddlybearman said:

AskAsk said:

different banks will have different lending criteria.  some are more cautious than others, so nationwide not approving the mortgage amount will not automatically mean santander will do the same.  what may be important is the shortfall amount as that being too big may not fall close enough if the buyer approach another bank.

you could give him a couple more weeks to raise the money from santander and see whether he gets a more favourable offer.  as someone has said, BLT is probably considered risk by the banks at the moment because of covid 19.

Well he said that Satander have gone through all his numbers with him and said should be ok (should...) and have told him that they commit to a valuation done by 9th Dec (although will probably be the same woman who did it for Nationwide....if they even bother coming out at all) and committed to a decision in 10-14 days.

Like i said they guy is very upfront and pro-active. I hope he's just not been too optimistic from the very start (or am i being over pessimistic lol)

i think santander are a bit more flexible with risk than nationwide.  nationwide is a very cautious bank, so i do think he will get a better chance with santander.

i doubt they will be using the same surveyor as each bank will have their own preferred surveyor.  the mortgage value very much depends on the achievable rental income.  rents have fallen because of covid 19 so this will have a downward pressure on the mortgage offered.  if he fails with santander, then it would time to put the property back on the market and sell to him if he does manage to raise capital, otherwise hope that someone else will come along.

Thanks for that - i think he said his mortgage was £1375 pm and i know houses on this road rent out for around £1600-£1800pm which is what the bank agreed with him in the first place. He does seem very keen to buy and he only has 30K left on his existing mortgage so he may well take some money out of his house to top up the deposit (told you he was telling me a lot about his business!)

Its only been in action over the last 5 weeks so whatever rent estimate they were giving in the first place wouldn't have changed much - i think maybe like you say Nationwide just got a bit windy and backed off. I used to be with them and i remember they were cautious. Moved over to HSBC a couple of years ago and they don't seem to care about anything!