How to protect myself from the lender pulling out at the last minute before completion?

pieroabcd

Hi,
I'm finally happy with the results of the searches and I want to proceed with the purchase.
Since I've read that sometimes the lender pulls out just hours before the completion, when the deposit has already been paid (and lost!), I absolutely want to avoid at all costs a situaton like this, therefore I've asked my solicitor to arrange for exchange and completion on the same day.

I realise that it may require more coordination with the sellers (they in a chain themselves).
I've also asked my solicitor to make explicitly sure with the lender that they are happy with delivering the mortgage in view of all thei findings.

If they don't agree with this plan, what can I do to protect myself from the lender pulling out? Is it possible to get a one-off indemnity covering me from the loss of the deposit?
Or in alternative, is it common to add a clause saying that if the lender pulls out the sellers must give me enough time to find another mortgage?

What other options are there?

One thing that i noticed is that the lender didn't do a hard credit check on me, while in the past another lender did it as soon as I applied for a mortgage on another house.
Not that they would find anything bad because fortunately my credit record is immaculate, but this makes me think that they didn't do all the  due checks from the start and that they are leaving something for the last moment.

Thanks

pinkshoes

pieroabcd said:

Hi,
I'm finally happy with the results of the searches and I want to proceed with the purchase.
Since I've read that sometimes the lender pulls out just hours before the completion, when the deposit has already been paid (and lost!), I absolutely want to avoid at all costs a situaton like this, therefore I've asked my solicitor to arrange for exchange and completion on the same day.

I realise that it may require more coordination with the sellers (they in a chain themselves).
I've also asked my solicitor to make explicitly sure with the lender that they are happy with delivering the mortgage in view of all thei findings.

If they don't agree with this plan, what can I do to protect myself from the lender pulling out? Is it possible to get a one-off indemnity covering me from the loss of the deposit?
Or in alternative, is it common to add a clause saying that if the lender pulls out the sellers must give me enough time to find another mortgage?

What other options are there?

One thing that i noticed is that the lender didn't do a hard credit check on me, while in the past another lender did it as soon as I applied for a mortgage on another house.
Not that they would find anything bad because fortunately my credit record is immaculate, but this makes me think that they didn't do all the  due checks from the start and that they are leaving something for the last moment.

Thanks

It's very rare for a mortgage to be pulled AFTER exchange. 

This would only happen if a lender had very good reason e.g. they found out about a change in your financial circumstances, they suspected fraudulent transactions, a severe problem with the property was discovered etc...

user1977

pieroabcd said:

I've read that sometimes the lender pulls out just hours before the completion

Where have you read this? I suspect you've misunderstood something. It isn't a realistic risk, which is why buyers don't normally have similar concerns to yours.

pieroabcd

user1977 said:

pieroabcd said:

I've read that sometimes the lender pulls out just hours before the completion

Where have you read this? I suspect you've misunderstood something. It isn't a realistic risk, which is why buyers don't normally have similar concerns to yours.

I've read it even in this forum. At the time there was something not certified with the water system.

user1977

pieroabcd said:

user1977 said:

pieroabcd said:

I've read that sometimes the lender pulls out just hours before the completion

Where have you read this? I suspect you've misunderstood something. It isn't a realistic risk, which is why buyers don't normally have similar concerns to yours.

I've read it even in this forum. At the time there was something not certified with the water system.

Ok, but can you point us towards an example? It is incredibly unlikely to happen other than for an obvious reason, such as you losing your job.

The one you mention isn't ringing a bell (though sounds like the sort of thing which ought to have been checked before exchange).

pieroabcd

user1977 said:

pieroabcd said:

user1977 said:

pieroabcd said:

I've read that sometimes the lender pulls out just hours before the completion

Where have you read this? I suspect you've misunderstood something. It isn't a realistic risk, which is why buyers don't normally have similar concerns to yours.

I've read it even in this forum. At the time there was something not certified with the water system.

Ok, but can you point us towards an example? It is incredibly unlikely to happen other than for an obvious reason, such as you losing your job.

The one you mention isn't ringing a bell (though sounds like the sort of thing which ought to have been checked before exchange).

If i find it I will link the post

nyermen

user1977 said:

pieroabcd said:

I've read that sometimes the lender pulls out just hours before the completion

Where have you read this? I suspect you've misunderstood something. It isn't a realistic risk, which is why buyers don't normally have similar concerns to yours.

To be fair, I've read a case as well - its not that they pull out "hours before completion" though, I seem to recall a thread where the result was the conveyancer requesting the funds the day before, and the bank doing a final credit check and not liking what they saw.  but as you say, a very unlikely case under circumstances such as a big change in credit history or something appearing on CIFAS/NH.

That said, OP - I dont think you'll get a clause accepted that allows a delay to completion to find another mortgage (which could take a month or more for all the legal checks etc to happen again.

nyermen

Update: Found a couple of the threads I was thinking of (appreciate one is not quite the same):
https://forums.moneysavingexpert.com/discussion/3168310/woolwich-withdrew-mortgage-offer-due-to-their-mistake-claim-compensation/p1

https://forums.moneysavingexpert.com/discussion/6406410/mortgage-offer-pulled-3-days-before-completion/p1

user1977

nyermen said:

Update: Found a couple of the threads I was thinking of (appreciate one is not quite the same):
https://forums.moneysavingexpert.com/discussion/3168310/woolwich-withdrew-mortgage-offer-due-to-their-mistake-claim-compensation/p1

That's not a mortgage offer being withdrawn, it's one which was never issued in the first place.

https://forums.moneysavingexpert.com/discussion/6406410/mortgage-offer-pulled-3-days-before-completion/p1

We never found out exactly what that was about, but it sounded like a change in the borrower's financial circumstances.

ReadingTim

nyermen said:

Update: Found a couple of the threads I was thinking of (appreciate one is not quite the same):
https://forums.moneysavingexpert.com/discussion/3168310/woolwich-withdrew-mortgage-offer-due-to-their-mistake-claim-compensation/p1

https://forums.moneysavingexpert.com/discussion/6406410/mortgage-offer-pulled-3-days-before-completion/p1

Stop reading and believing every horror story you can find on the internet would be a good start.  For every weird, wonderful, freak or unique hitch, thousands, if not tens of thousands of transactions occur without hitch.  

And if you'd like to worry about something, may I suggest alien abduction - it's probably more realistic.  

EssexHebridean

I've worked in a firm of solicitors handling primarily conveyancing matters for over 12 years and in that time I have never seen a case where the lender has pulled the funding between exchange and completion.