Considering lower my offer due to mortgage rates increase, is this a reasonable excuse?

sheramber

Nobody is ignoring the recent increases in cost of living and that costs have gone up.

The bottom line is the same. You now cannot now afford the house.

The red flags that people are seeing is that you say you entered into buying a house that was at the limit of your affordability. that did not allow any room for future increases in expenditure.

You are now wanting to proceed still at the maximum you can afford now.

What happens if the bank rate  goes up in two weeks , as is forecast to happen.

Your lender looks at what your income and compulsory outgoings are and decides on affordability.

He does not consider you have energy bills, living expenses, want to have a car, or two, A holiday or two. Mobile phones. big telly, Skye tv and other gadgets.

So, what he thinks you can afford is not the same as you are comfortable with along with all the extras that make life more pleasant.

Sarah1Mitty2

TheJP said:

Troy_af said:

Hello.

 The only possible solution I can think of is that I request a reduction in the asking price to bring the payments back down.. which would be around £6,000.

I know I am well within my rights to ask for this because without doing so I will have to pull out and the chain will collapse. But on the other hand I know it sounds extremely cheeky and I would not be happy if it was to happen to me the other way around, so I am just looking for some advice.

So your buyer pulled out and you want your seller to pony up £6k because you over stretched yourself. House ownership doesn't suit you.

Adjust expectations along with budget and you will then come to a manageable conclusion. 

The next person along to buy will be affected by rates/cost of living as well so how does the seller benefit in any way by refusing the offer?

tooldle

Sarah1Mitty2 said:

TheJP said:

Troy_af said:

Hello.

 The only possible solution I can think of is that I request a reduction in the asking price to bring the payments back down.. which would be around £6,000.

I know I am well within my rights to ask for this because without doing so I will have to pull out and the chain will collapse. But on the other hand I know it sounds extremely cheeky and I would not be happy if it was to happen to me the other way around, so I am just looking for some advice.

So your buyer pulled out and you want your seller to pony up £6k because you over stretched yourself. House ownership doesn't suit you.

Adjust expectations along with budget and you will then come to a manageable conclusion. 

The next person along to buy will be affected by rates/cost of living as well so how does the seller benefit in any way by refusing the offer?

The mortgage rate is only part of the issue. The level of borrowing is the other. Two potential purchasers each earning the same salary and with the same expenses. Far more wriggle room for those with a low loan to value. 
My first house was a 95% mortgage at 7.75%, my second was a 50% mortgage at 5.29%. Current place was a cash purchase.
If i were the OP, I'd stay where i am, pay down the existing loan as much as possible and wait a while before considering my next move. 

Troy_af

sheramber said:

Nobody is ignoring the recent increases in cost of living and that costs have gone up.

The bottom line is the same. You now cannot now afford the house.

The red flags that people are seeing is that you say you entered into buying a house that was at the limit of your affordability. that did not allow any room for future increases in expenditure.

This clarifies exactly where the confusion and negativity seems to be coming from here. I absolutely did not enter into buying a house at the limit of my affordability with no room for future increases. My essential outgoings could be as high as 30% over what they were 6 month ago, unfortunately this is outside of my safety buffer. What I could afford 6 month ago, is different to what I can afford now.

But I get it that some people just cannot accept that and in their opinion, it is my own fault and I should have budgeted better.

Troy_af

tooldle said:

Sarah1Mitty2 said:

TheJP said:

Troy_af said:

Hello.

 The only possible solution I can think of is that I request a reduction in the asking price to bring the payments back down.. which would be around £6,000.

I know I am well within my rights to ask for this because without doing so I will have to pull out and the chain will collapse. But on the other hand I know it sounds extremely cheeky and I would not be happy if it was to happen to me the other way around, so I am just looking for some advice.

So your buyer pulled out and you want your seller to pony up £6k because you over stretched yourself. House ownership doesn't suit you.

Adjust expectations along with budget and you will then come to a manageable conclusion. 

The next person along to buy will be affected by rates/cost of living as well so how does the seller benefit in any way by refusing the offer?

The mortgage rate is only part of the issue. The level of borrowing is the other. Two potential purchasers each earning the same salary and with the same expenses. Far more wriggle room for those with a low loan to value. 
My first house was a 95% mortgage at 7.75%, my second was a 50% mortgage at 5.29%. Current place was a cash purchase.
If i were the OP, I'd stay where i am, pay down the existing loan as much as possible and wait a while before considering my next move. 

Are you saying to basically save up for a bigger deposit? I am looking at around 81% LTV right now if that helps.

tooldle

Troy_af said:

tooldle said:

Sarah1Mitty2 said:

TheJP said:

Troy_af said:

Hello.

 The only possible solution I can think of is that I request a reduction in the asking price to bring the payments back down.. which would be around £6,000.

I know I am well within my rights to ask for this because without doing so I will have to pull out and the chain will collapse. But on the other hand I know it sounds extremely cheeky and I would not be happy if it was to happen to me the other way around, so I am just looking for some advice.

So your buyer pulled out and you want your seller to pony up £6k because you over stretched yourself. House ownership doesn't suit you.

Adjust expectations along with budget and you will then come to a manageable conclusion. 

The next person along to buy will be affected by rates/cost of living as well so how does the seller benefit in any way by refusing the offer?

The mortgage rate is only part of the issue. The level of borrowing is the other. Two potential purchasers each earning the same salary and with the same expenses. Far more wriggle room for those with a low loan to value. 
My first house was a 95% mortgage at 7.75%, my second was a 50% mortgage at 5.29%. Current place was a cash purchase.
If i were the OP, I'd stay where i am, pay down the existing loan as much as possible and wait a while before considering my next move. 

Are you saying to basically save up for a bigger deposit? I am looking at around 81% LTV right now if that helps.

Effectively yes, throw everything you have at your current mortgage. Those overpayments build your equity and are an extra, so you can stop making them if financially things get more difficult (prices increases, job loss or reduction in hours). Only you know your exact figures as a percentage of your income and what level of income you need to support just the basics. Base rates go up and down and in recent years incremental changes have been very small. I am old enough to remember those incremental changes being not so small. None of us know where base rates will end up and with everything rising in price, i personally would not risk the roof over my head if my wiggle room was roughly £100 per month on my new mortgage. I'd stay where i am in my comfort zone and stash as much of my cash into mortgage / savings as i can, and wait to see what happens. 

housebuyer143

Personally I know what the bank says my max borrowing is and there is absolutely 0 chance I agree with them and would take a loan at that value. 
I feel very uneasy being that exposed. I only borrowed 60% of my max affordability and I am therefore much more insulated against rate rises. 
Not everyone is able to do this though and be able to move up to a house that they need or want so are much more at risk to overstretching. 

Sarah1Mitty2

Troy_af said:

sheramber said:

Nobody is ignoring the recent increases in cost of living and that costs have gone up.

The bottom line is the same. You now cannot now afford the house.

The red flags that people are seeing is that you say you entered into buying a house that was at the limit of your affordability. that did not allow any room for future increases in expenditure.

This clarifies exactly where the confusion and negativity seems to be coming from here. I absolutely did not enter into buying a house at the limit of my affordability with no room for future increases. My essential outgoings could be as high as 30% over what they were 6 month ago, unfortunately this is outside of my safety buffer. What I could afford 6 month ago, is different to what I can afford now.

But I get it that some people just cannot accept that and in their opinion, it is my own fault and I should have budgeted better.

By lowering your offer you communicate to the seller that they are involved in a negotiation and are not running the transaction for their own gain, that seems to attract negativity on here for some reason.

deano2099

Troy_af said:

sheramber said:

Nobody is ignoring the recent increases in cost of living and that costs have gone up.

The bottom line is the same. You now cannot now afford the house.

The red flags that people are seeing is that you say you entered into buying a house that was at the limit of your affordability. that did not allow any room for future increases in expenditure.

This clarifies exactly where the confusion and negativity seems to be coming from here. I absolutely did not enter into buying a house at the limit of my affordability with no room for future increases. My essential outgoings could be as high as 30% over what they were 6 month ago, unfortunately this is outside of my safety buffer. What I could afford 6 month ago, is different to what I can afford now.

But I get it that some people just cannot accept that and in their opinion, it is my own fault and I should have budgeted better.

It's because you said you can no longer afford it, when the reality is you probably can. What you mean is that you don't want to spend all your income on the mortgage and bills and have no money left with which to enjoy life.
Which also sort of makes your ask of a reduction a bit more cheeky - it's not that the sale/chain will fall through because the mortgage company won't lend you the money any more. It's that you're not comfortable with monthly payments that high.
People tend to instantly jump to conclusions on the far end of one scale or the other on here.

It's not unreasonable for you to ask for a reduction but it's also not unreasonable for them to refuse. The only thing I think would be "unreasonable" is if you tell them you literally can't afford it so will have to pull out unless they give you a reduction, they say "no" and then you say "actually I've changed my mind I can still afford it". 

propertyhunter

To be honest, I would try with reducing the offer and see what happens. The market is cooling, and any house listing today will not achieve the same price as a few months ago. Even the other offers on the table from the first round will not offer the same amount. If they pull the house from sale to you, then take it as dodging a bullet. I'm sorry to say, there's always better houses out there. Right now, if affordability is an issue I would not move at all if my life could handle that (i.e. don't need more space for kids). I wouldn't 'waste' money on stamp duty, etc. for a purchase that wasn't essential to my wellbeing or those living with me.