Mortgage declined

eddddy

Newthings said:

A big thank you guys. It looks like I have to do a bridging loan for a month and then make the changes to then get a residential mortgage. Thanks though ❤

Many of the mainstream mortgage lenders won't offer you a mortgage when you've owned the property for just 1 month - they often require you to wait until you've owned it for 6 months. 6 months of bridging finance could get expensive.

So it's worth checking out the future mortgage situation, before committing to the bridging loan route.

steampowered

Bridging loans are often unbelievably expensive.

Make sure you understand exactly how many £000s you would be spending on the loan before going down that route.

Hannimal

Sotts said:

kingstreet said:

Sotts said:

steve866 said:

SMR710 said:

Your mortgage broker should have advised you of the potential issue prior to application so that you could have risk assessed whether you wanted to submit a full mortgage application. It's well known properties with 2 kitchens are not easily approved for a mortgage. Now you have a declined application under your belt and a credit check done too. If you were paying a mortgage advisor for advice, I'd go back and ask why this advice was not made clear to you. 

Is a declined application really an issue when they are declining the house rather than the person?

Yes it will show on the credit file as declined.  It won't have a reason.  Potential lenders will just see that OP has had a mortgage declined

Not true. Only a search will be visible.

Yes youre right.  It will show as a hard search for mortgage application.  Any Lender will know that if you have a search for a mortgage and are applying for another mortgage, it's likely that the first one was declined.   But you should be able to explain this at the time of application

Stop scaremongering. You could have a hard search because you were about to buy a house and the sale fell through for any of a million different possible reasons. Lenders won't assume it's because another lender declined you.

Hannimal

Sotts said:

Is there something really special about the house that's worth all the trouble?  

Especially as sellers aren't even motivated enough to sell to take out a spare kitchen

Newthings

Hi All, thanks for the feedback! I spoke to virgin, they explained that after paying the exit fee for my current mortgage I wanted to port, if apply for a mortgage with them  once I've paid for the house in cash and made the changes i can then go back to them and use the mortgage I wanted to originally port, providing i do this within 90 days I can get my exit fee back.

I wanted to go through the bringing route but instead I have a family member who said they will give me the money to buy the house providing I can give it back to them within a 3 months, will have a contracts etc. 

Really focused on getting this house as its such a good future investment and I know its a rare find, plus I got 10% off the price.
Let's see how it goes. Will keep you update.


Am kicking myself as its such a pickle.

Again thanks for the replies guys!

[Deleted User]

eddddy said:

Newthings said:

A big thank you guys. It looks like I have to do a bridging loan for a month and then make the changes to then get a residential mortgage. Thanks though ❤

Many of the mainstream mortgage lenders won't offer you a mortgage when you've owned the property for just 1 month - they often require you to wait until you've owned it for 6 months. 6 months of bridging finance could get expensive.

So it's worth checking out the future mortgage situation, before committing to the bridging loan route.

I think you're getting confused with a change of ownership.  Mortgage lenders have rules about buying a property where the vendor has only owned the property for a short time, typically less than months.  In the case of a bridging loan the person wanting to mortgage the property to pay off the bridging loan is already the owner so there's no need to have a bridging loan for a minimum of 6 months.

eddddy

Lover_of_Lycra said:

eddddy said:

Newthings said:

A big thank you guys. It looks like I have to do a bridging loan for a month and then make the changes to then get a residential mortgage. Thanks though ❤

Many of the mainstream mortgage lenders won't offer you a mortgage when you've owned the property for just 1 month - they often require you to wait until you've owned it for 6 months. 6 months of bridging finance could get expensive.

So it's worth checking out the future mortgage situation, before committing to the bridging loan route.

I think you're getting confused with a change of ownership.  Mortgage lenders have rules about buying a property where the vendor has only owned the property for a short time, typically less than months.  In the case of a bridging loan the person wanting to mortgage the property to pay off the bridging loan is already the owner so there's no need to have a bridging loan for a minimum of 6 months.

Nope - not getting confused.

Here are some quotes from mortgage brokers:

If I Buy a Home with Cash, Can I Get a Quick Remortgage?
You’d still typically have to wait a minimum of 6 months from the date your name is registered as the owner on the title deeds before you could remortgage, regardless of whether you purchased the property with a mortgage or cash.

Link: https://www.charcol.co.uk/news-and-opinions/ask-the-mortgage-experts/can-i-remortgage-within-6-months-of-purchase-4910/

Can I remortgage if I own my house outright?
People who have no mortgage on their home, (known as an unencumbered property) are in a strong position to remortgage. 
Can I remortgage a property I have recently purchased?
Some lenders will not offer you a remortgage until you have owned a property for at least 6 months. The good news is that others will let you remortgage from day one.

Link: https://www.landc.co.uk/mortgage-guides/can-i-remortgage-my-home/

Here's a quote from TSB:

• Loans on mortgage-free properties are treated as remortgages. The applicant is only eligible for the Remortgage range of products and incentives. Free legal fees are available for these applications, a free valuation option is available.

• The property must have been registered in the applicant's name (or at least one of the applicants' names) for a minimum of 6 months unless the property has been inherited and the applicant is a beneficiary.

• Applications where the applicant is not a beneficiary of the inherited property, and the beneficiary has owned the property for less than 6 months, are not acceptable.

Link; http://intermediary.tsb.co.uk/criteria/residential-criteria/mortgage-free-property/

But it sounds like the OP has enquired, and Virgin Money are more flexible.

Edit to add...

I just found a quote from a mortgage broker which seems to confirm that Virgin Money are more flexible:

Which Mortgage Lenders can consider an Early Remortgage?

• Barclays

• Principality

• Santander

• Virgin Money

These lenders can consider an Early Remortgage subject to further assessment.

Link: https://glow.mortgage/how-early-can-you-remortgage/

Newthings

You guys are so impressive with all your knowledge. Honestly so grateful for your input

Slithery

Did you actually look into the price of bridging loans? Last time I saw they were around 10% interest per month.

Crashy_Time

Newthings said:

Hi All, thanks for the feedback! I spoke to virgin, they explained that after paying the exit fee for my current mortgage I wanted to port, if apply for a mortgage with them  once I've paid for the house in cash and made the changes i can then go back to them and use the mortgage I wanted to originally port, providing i do this within 90 days I can get my exit fee back.

I wanted to go through the bringing route but instead I have a family member who said they will give me the money to buy the house providing I can give it back to them within a 3 months, will have a contracts etc. 

Really focused on getting this house as its such a good future investment and I know its a rare find, plus I got 10% off the price.
Let's see how it goes. Will keep you update.


Am kicking myself as its such a pickle.

Again thanks for the replies guys!

How do you know?