Mortgage Broker applied for wrong product...

rhianny2244

We were sent an illustration for a 95% LTV mortgage which we agreed to apply for with Barclays. We are in Scotland - the House value on the home report was £170000 and we offered £185000. We asked to borrow £161500 and the additional £15000 over the value would be paid by us.
I phoned Barclays today as I had not heard from my Broker - turns out the product applied for was a 10% LTV. He put the value of the house in on the application as £185000. And to top it off the valuation by Barclays has some back as higher than the home report as £175000. The man at Barclays said "im sorry to say the house has been down valued so you may have to change the product you have applied for". Obviously this confused me as this is higher than the home report...
I have NO idea where to even begin with this...Clearly our broker has COMPLETELY messed up our entire application...I have no idea how or why as the illustration was completely correct?
I have emailed my broker asking him to call me urgently first thing tomorrow morning but wondered if anyone had experience with Barclays - would we need to be credit checked again or would it be a simple case of them switching the product we applied for? I am sorry for the confusing message but i am confused by the whole situation as well! Any help would be appreciated!
thanks!

JonMitchell

Was your offer at £185K at a closing date or just a straight offer that was accepted? Either case, your broker seems to have correctly entered the offered value of £185K. Unless I understood wrongly. Your solicitor would have submitted this offer on your behalf too.

Was there anything adverse in the HR that you would have a copy of? Are there any 3's in the report and what are they? 

Valuation came back at £175K but lower than the offered £185K, in essence they down valued against the offered price, as you mentioned. 

There is something rather strange in your LTV illustration...

95% LTV of £185K - deposit £9250 but you are putting down deposit of £15K, which is 8.1%.

I think your broker was basing on this 8.1% that he then went ahead with a 90% LTV, with you having to come out with and extra £3.5K to top it to £18.5K - is this something you can come out with? As mortgages at 90% would have a better interest rate compared over 95%, though not that much but every little helps. 





    

[Deleted User]

Most lenders systems arent set up for the Scottish system unfortunately.  They just have a box for 'purchase price' and you have to ignore this and key the valuation in here and upload a memo with the actual details.

Everything you have described is really easily done and i dont see any massive issue to correct itm. It will literally just be a memo and 48 hours and it will be sorted. No extra checks, just admin

rhianny2244

Thanks very much for the reply. In Scotland you can only get a mortgage for the value given in the home report which was £170000. We offered £185000 at closing date knowing that we would be paying the £15000 over the house value as it would not be mortgageable. We would then be paying a 5 percent deposit on the 170000 for the mortgage of £8500. 

This was all correct in the mortgage illustration that we were given before we applied. But it seems this information was not input correctly and the complete wrong product applied for. 

Barclays did the valuation and because the broker had put the house value as £185000 they advised me the house had been down value to £175000…but in fact this is a £5000 increase to the value in the home report. 

It’s all so confusing!

[Deleted User]

Most lenders systems arent set up for the Scottish system unfortunately.  They just have a box for 'purchase price' and you have to ignore this and key the valuation in here and upload a memo with the actual details.

Everything you have described is really easily done and i dont see any massive issue to correct itm. It will literally just be a memo and 48 hours and it will be sorted. No extra checks, just admin

rhianny2244

Deleted_User said:

Most lenders systems arent set up for the Scottish system unfortunately.  They just have a box for 'purchase price' and you have to ignore this and key the valuation in here and upload a memo with the actual details.

Everything you have described is really easily done and i dont see any massive issue to correct itm. It will literally just be a memo and 48 hours and it will be sorted. No extra checks, just admin

Thankyou for the reply. That is such a relief that it should just be an admin update. We have been so worried we would have to have another hard check done on us for the new affordability etc. 

Would you know what will happen due to the Barclays valuation being higher than the one on the home report? 

JonMitchell

rhianny2244 said:

Thanks very much for the reply. In Scotland you can only get a mortgage for the value given in the home report which was £170000. We offered £185000 at closing date knowing that we would be paying the £15000 over the house value as it would not be mortgageable. We would then be paying a 5 percent deposit on the 170000 for the mortgage of £8500. 

This was all correct in the mortgage illustration that we were given before we applied. But it seems this information was not input correctly and the complete wrong product applied for. 

Barclays did the valuation and because the broker had put the house value as £185000 they advised me the house had been down value to £175000…but in fact this is a £5000 increase to the value in the home report. 

It’s all so confusing!

Not too correct on your point that mortgage is based on HR report. I have a property in Edinburgh that I recently bought, though I live south-east England.

The mortgage was based on the FINAL accepted offer on closing date - ie bidding. That was my asking earlier on whether your offer was at a closing date or a straight offer. But it is based separately from what is reported in the HR.

The valuation was then done based around the accepted offer figure, nothing to do with HR. The valuation surveyor will not have a clue about what HR had reported unless he was given a copy by the EA. 

Your mortgage lender will not look at all on the HR, they will have to base on what their own surveyor valued the property independently, to cover the lenders' risk to lend.

[Deleted User]

JonMitchell said:

rhianny2244 said:

Thanks very much for the reply. In Scotland you can only get a mortgage for the value given in the home report which was £170000. We offered £185000 at closing date knowing that we would be paying the £15000 over the house value as it would not be mortgageable. We would then be paying a 5 percent deposit on the 170000 for the mortgage of £8500. 

This was all correct in the mortgage illustration that we were given before we applied. But it seems this information was not input correctly and the complete wrong product applied for. 

Barclays did the valuation and because the broker had put the house value as £185000 they advised me the house had been down value to £175000…but in fact this is a £5000 increase to the value in the home report. 

It’s all so confusing!

The mortgage was based on the FINAL accepted offer on closing date - ie bidding. That was my asking earlier on whether your offer was at a closing date or a straight offer. But it is based separately from what is reported in the HR.

The valuation was then done based around the accepted offer figure, nothing to do with HR. The valuation surveyor will not have a clue about what HR had reported unless he was given a copy by the EA. 

Your mortgage lender will not look at all on the HR, they will have to base on what their own surveyor valued the property independently, to cover the lenders' risk to lend.

Thats certainly not a rule across all lenders.  In my experience it is more common for the HR value to be used as long as thr valuer is on the lenders panel.   I work in England but am Scottish so tend to get a lot of friends and family asking me to arrange mortgages.   The last 4 transactions i did with 4 different high street lenders all used the HR value when the purchase price was higher. 

JonMitchell

Deleted_User said:

JonMitchell said:

rhianny2244 said:

Thanks very much for the reply. In Scotland you can only get a mortgage for the value given in the home report which was £170000. We offered £185000 at closing date knowing that we would be paying the £15000 over the house value as it would not be mortgageable. We would then be paying a 5 percent deposit on the 170000 for the mortgage of £8500. 

This was all correct in the mortgage illustration that we were given before we applied. But it seems this information was not input correctly and the complete wrong product applied for. 

Barclays did the valuation and because the broker had put the house value as £185000 they advised me the house had been down value to £175000…but in fact this is a £5000 increase to the value in the home report. 

It’s all so confusing!

The mortgage was based on the FINAL accepted offer on closing date - ie bidding. That was my asking earlier on whether your offer was at a closing date or a straight offer. But it is based separately from what is reported in the HR.

The valuation was then done based around the accepted offer figure, nothing to do with HR. The valuation surveyor will not have a clue about what HR had reported unless he was given a copy by the EA. 

Your mortgage lender will not look at all on the HR, they will have to base on what their own surveyor valued the property independently, to cover the lenders' risk to lend.

Thats certainly not a rule across all lenders.  In my experience it is more common for the HR value to be used as long as thr valuer is on the lenders panel.   I work in England but am Scottish so tend to get a lot of friends and family asking me to arrange mortgages.   The last 4 transactions i did with 4 different high street lenders all used the HR value when the purchase price was higher. 

That’s interesting to know. The property I bought in Edinburgh was £12K over HR report. And the three high street lenders my mb approached all uses the final offer, although we applied only through one of them.

all the best for OP