Change in Circumstances Prior to Exchange

Conan1Sett

Tokmon said:

Conan1Sett said:

MaryNB said:

AdrianC said:

The sooner you talk to the lender, the better.

If this is debt consolidation, though, surely the original offer came while you had those debts? But £7,500 is a big chunk more than £2,700 + £1,600 + £400 + £1,000 = £5,700

I'm surprised they'd have accepted borrowed equity plus card debts, though. Sub-prime lender?

I think the remaining £1,800 is 

Conan1Sett said:

....to replace an existing loan that was used to make up my mortgage deposit....

You may be ok if the lender doesn't do another credit check before exchange but this is a big IF and no way of knowing if they will or not. Talking to the lender know is the only way to find out if this loan will be an issue. Did you need to replace the existing loan and consolidate your credit card debt before exchange? I realise it's too late now but in future you should never take out credit before exchange. 

These CC debts were not there during the application stage. However, several months passed and I was in a position where I was bleeding cash because I had no fixed abode. 

My financial situation is somewhat better than when I began the application but I'm just wondering if I will end up in the bin what with the new loan. 

The extra £1800 is surplus. 

You should pay back the surplus to reduce the amount of interest you are paying, no point in borrowing money and paying interest just to keep it in the bank!.

How much is your total deposit?

It is £6000 and I hold £9000 when all is repaid. Except for the loan balances. 

[Deleted User]

run it through the lenders affordability calculator and see if it still fits affordability. If it does then declare it as a new outgoing.  They are unklikely to care about what has happened in your life, maybe an underwriter will ask and then you can tell them but generally only give information you are asked for.  

If it doesnt fit then thats a different decision to make. Either find a new lender which does fit affordability, or try to get away with not telling them (risky)

Has the actual source of deposit changed?  You mentioned it was a loan originally? 

Conan1Sett

Deleted_User said:

run it through the lenders affordability calculator and see if it still fits affordability. If it does then declare it as a new outgoing.  They are unklikely to care about what has happened in your life, maybe an underwriter will ask and then you can tell them but generally only give information you are asked for.  

If it doesnt fit then thats a different decision to make. Either find a new lender which does fit affordability, or try to get away with not telling them (risky)

Has the actual source of deposit changed?  You mentioned it was a loan originally? 

Yeah I am planning on replacing £3k that was the source of the deposit with funds from my new loan. 

[Deleted User]

so the £3k was originally a loan?  And now its a different loan?  

Is the lender ok with it being a loan?  

Conan1Sett

Deleted_User said:

so the £3k was originally a loan?  And now its a different loan?  

Is the lender ok with it being a loan?  

Yeah I declared that the deposit was made up of unsecured borrowing, and there were ok with that. I did get the offer.

The original loan is now replaced with a different loan (with a better APR but over a longer term) and I am needing to declare that. 

[Deleted User]

Id just run it through affordability calcs and if it fits then notify the lender 

Conan1Sett

Deleted_User said:

Id just run it through affordability calcs and if it fits then notify the lender 

Roger that. 

What would be the consequences of not exchanging?

Would I be lighter by the product fee and the conveyancing fees? 

badger09

Conan1Sett said:

Deleted_User said:

Id just run it through affordability calcs and if it fits then notify the lender 

Roger that. 

What would be the consequences of not exchanging?

Would I be lighter by the product fee and the conveyancing fees? 

For you, the consequence of not exchanging is that you don't buy the property & lose any fees you've paid out plus any aborted purchase fees your conveyancer will charge, depending on what your contract with them specifies.

For your vendor, the consequences will probably mean they lose their onward purchase, as will everyone else in the chain  above them, and they will all have incurred costs.

Please do the decent thing - speak to your lender as soon as possible and confirm whether or not you still have a suitable mortgage offer. If not, inform your vendor so they can remarket their property.

Good luck.

Conan1Sett

badger09 said:

Conan1Sett said:

Deleted_User said:

Id just run it through affordability calcs and if it fits then notify the lender 

Roger that. 

What would be the consequences of not exchanging?

Would I be lighter by the product fee and the conveyancing fees? 

For you, the consequence of not exchanging is that you don't buy the property & lose any fees you've paid out plus any aborted purchase fees your conveyancer will charge, depending on what your contract with them specifies.

For your vendor, the consequences will probably mean they lose their onward purchase, as will everyone else in the chain  above them, and they will all have incurred costs.

Please do the decent thing - speak to your lender as soon as possible and confirm whether or not you still have a suitable mortgage offer. If not, inform your vendor so they can remarket their property.

Good luck.

Well I'm hopeful because the mortgage offer was for 51k and requires a deposit of 6k. I hold nearly twice that amount in my account currently. The property price is £57.5k.

My wages per annum are £29k. 

I accepted a £999 product fee and the conveyancing estimate was approximately 1k. I have paid £300 to them so far for the initial searches. 

It will not be the end of the world but I'm guessing I will not be a popular guy around the market. 

If it does fall through, when is it a good time to re-apply?