Mistake on mortgage application

lukekelly19

Me and my partner recently got an offer for a mortgage with Nationwide, but we aren't going to be able to accept one of the terms. It states that my partner must be released from my partner's existing mortgage on or before buying the new house. She is unlikely to be able to sell in time. We had intended to buy the new house before my partner's current flat was sold - and the seller is selling to us on this basis. (we said on the form that we would have no mortgages remaining when we got the new one, meaning that we would sell asap, not realising that it would become such a rigid condition of the mortgage offer). 

We can therefore 1. Try and sell our current flat as quickly as possible, and perhaps delay purchase of new house. We would likely make a 'new' mortgage application to port our current mortgage.

2. a) re-apply for a mortgage with nationwide saying that my partner will still have a mortgage to pay off (even though in reality, this will almost certainly be paid off in a few weeks or months).
b) apply for a new mortgage with another provider stating that my partner will still have an existing mortgage to pay off.

My questions are, would 2. a) count as another application, with another credit check, and would that credit check affect our credit scores?
Would the credit check accompanying 2.b) affect our credit score, and how much?

flashg67

Only from my broker told me, as I had to make two applications last year  - it wouldn't (and months later doesn't seem to have) affect my credit score (if they actually mean anything anyway), so unlikely to be an issue even if the count it as a new application.
A broker might be better rather than applying at random as they are likely to know which lenders will be ok with your situation or not

lukekelly19

Thanks Flashg67, that's good to know!

[Deleted User]

what is your loan to value?  And how did Nationwide come to the idea that the mortgage would be cleared prior to completion?  

fyi if it isnt cleared prior to completion your borrowing amount on the affordability calculator will have to cover both mortgage balances

MWT

lukekelly19 said:

(we said on the form that we would have no mortgages remaining when we got the new one, meaning that we would sell asap, not realising that it would become such a rigid condition of the mortgage offer).

2. a) re-apply for a mortgage with nationwide saying that my partner will still have a mortgage to pay off (even though in reality, this will almost certainly be paid off in a few weeks or months).

These are not vague approximate statements, 'no mortgages remaining' means exactly that, no other mortgage, not, no mortgage soon...

Similarly if there is another mortgage even if only for a day, it is correct to say there is still another mortgage, there is no 'even though...'.

As Deleted_User said, check the affordability calculator to see if you even have the option to proceed before the other mortgage is redeemed.

davidmcn

Deleted_User said:

how did Nationwide come to the idea that the mortgage would be cleared prior to completion?  

Because that's what the OP told them! "We said on the form that we would have no mortgages remaining when we got the new one".

[Deleted User]

davidmcn said:

Deleted_User said:

how did Nationwide come to the idea that the mortgage would be cleared prior to completion?  

Because that's what the OP told them! "We said on the form that we would have no mortgages remaining when we got the new one".

lighten up Davie, we all skim read stuff sometimes :-:smile:



My 2nd point about the affordability is valid though

OP - There is a chance they will decline as they only allow 2nd residential properties for certain reasons:

Nationwide can consider lending for the following second property uses:

• Holiday homes in the UK or abroad (where the property being purchased is abroad, the loan must be secured on a property in the UK).
• Second homes due to work location (Pied a terre).
• Accommodation for wholly dependent relatives.
• A new main residence where the applicant wishes to let their existing property rather than sell it

If you arent selling the existing one then:

Affordability figure needs to cover all mortgages that will be outstanding at the time of completion, please also see clients with additional properties.

Where your client has, or will have on completion, only one mortgaged property, standard LTV limits will apply. Maximum 85% LTV will continue to apply if the client will own two or more mortgaged properties on completion and will be treated as a Second Property application, even if the property being purchased or remortgaged will be your client’s main residence.

lukekelly19

loan to value is about 35%. this is based on our current deposit and the mortgage we've asked for - not including my partner's existing mortgage and likely equity from her current flat.

They came to the idea that it would be sold because we said, in answer to their question, we would have no other mortgages on completion. Stupidly we didn't realise that this might translate into a rigid condition. In saying this we meant that we are selling my partner's flat asap - it will likely be sold soon after we get the new house. So in reality we will almost certainly have no debt from the old mortgage beyond a few weeks or months. But the nationwide mortgage specifies that it has to be before. 

[Deleted User]

solicitor wont allow completion with the other mortgage being in place as it will be on the offer as a condition so either contact them to see if you meet criteria with it being in place, sell it prior to completion, or find a new lender who allows you to do what you want to do

lukekelly19

I appreciate the logic of the mortgage condition now. It seems reasonable, and now seems obvious that the question would lead to the condition.
But given we have a deposit of around 65% of the value of the new house, and are current and future mortgage are both very affordable (and although it can't be factored in, the flat sale is highly likely!), I'm hoping it's possible to get a mortgage anyway.
Thanks for your advice Deleted_User and MWT!

[Deleted User]

There are basically 2 paths lenders take with 2nd home affordability:

1.  Loan amount on affordability page has to cover both mortgage balances
2. Input current mortgage payment as an ongoing commitment and see if the affordability calculator gives enough. 

The affordability side is sometimes the easy bit, its the 2nd residential home criteria that can be a bit of a nightmare to navigate.