RBS refusing mortgage offer. Any advice please?

ACG

nunntrev said:

Thank you for your comment Hoenir.

the background for the original refusal was that RBS advertised a 5 year fix at 3.1% in July 2022 for properties energy rated A or B. My house was rated C but the works to the house were intended to get it to A or B. I enquired whether this would make me eligible. The bank confirmed that it would. They then took 6 months to reach their decision and advised that they wouldn’t lend as it was not A or B rated. By this time, their 5 year fix was 5%. The ombudsman determined that the audit trail proved that they had agreed that I was eligible at the outset so should honour the original rate. Had the mortgage been approved when it should have, I would have subsequently started work and the house would at some point in the works been uninhabitable in any event. When I first applied, they valued the house at £1.8m. The house is currently uninhabitable but they have given an after works valuation of £2.05m. I am seeking to borrow 500k.

I think this explains it...
You have applied for a green product and have done so based on the Energy rating being A or B after the works are complete? 

Presumably if you had applied for a non green mortgage before starting the work they would have provided the mortgage? 

Tricky one, obviously you made decisions based on what you were told by one of their employees. Im not sure I would class it as spurious, I would say some call centre worker has given you duff information but the underwriter is doing their job correctly. (Admittedly I am sort of making a few assumptions to fill in the gaps so I could be wrong). 

My personal view is a little along the lines of amn, I cant see you getting very far with RBS. I would get the property habitable and then raise a mortgage. Then work out had you been given the correct information, the amount you have paid in interest would have been x, but you have actually paid y, and so you want the difference. 

However, it is important to note, that you were not eligible for the green product so rather than 3.1% it would have been the non green product (probably 3.2%)... Im not saying you will get the difference, but I think that is more likely than forcing RBS to lend or going back and saying you want money with no actual explanation as to how you got to the figure you got to. 

If I had made this mistake as the broker (knowing I would be on the hook) that is what my suggestion would be to try and make the best of a bad situation. Whether you agree with that and RBS would see it in the same light is another matter. 

kingstreet

FWIW NatWest/RBS won't allow a green product on a newbuild unless it has an EPC visible on the register at the time of application, unless an approved builder. Others are happy with Predicted Energy Assessments, but not them.

I don't know of any "normal" lender who bases a remortgage valuation on a post-improved state. Current value and habitability is usual.

NatWest/RBS criteria;-

Green Mortgages

Green mortgages are available to all intermediaries for all residential and Buy to Let properties with an energy performance rating of A or B and specific new build developer properties. Available for Purchase, Porting & Remortgage applications. 

Please note the following information:

Property must be in the UK.

• There must be either a valid Energy Performance Certificate (EPC) listed on the registers detailed below with a rating of A or B to be eligible or a property from our list of agreed new build developers
• No other EPC data registers or documentation will be accepted, for example a Predicted Energy Assessment (PEA).
• Properties where there is currently only a proposed or anticipated EPC Rating of A or B are not eligible.
  

nunntrev

Thanks Kingstreet but to be clear, I queried this with RBS before I applied and was told by the relationship manager that I would be eligible. This was recorded in a zoom and RBS admitted to its blunder hence why they have already paid compensation and agreed with Financial Ombudsman’s ruling that they must honour the original agreement that I would be eligible. Also, for avoidance of doubt, it is not a new build. The house was built in 1989 but we are undertaking major improvements that mean it is temporarily uninhabitable while work is taking place. As RBS’ mortgage guidelines state that they provide remortgages for home renovations (and even include debt consolidation as a purpose) and valued the house at £1.8m before works and valued it at £2.05m after it is finished I’m still struggling why they won’t now lend 25% of this. The plot alone is worth more double the amount I’m borrowing. I’d have thought that they lend against risk so struggling to see what that risk is? 

MWT

nunntrev said:

Thanks Kingstreet but to be clear, I queried this with RBS before I applied and was told by the relationship manager that I would be eligible.

So despite the terms of the loan type clearly stating you were not eligible you elected to go with the information provided by the relationship manager.

When it turned out they were wrong you got compensation and RBS were required to honour the original offer and had you not started the building work, I imagine they would have done so...

Problem is by starting the building work you then took the property outside the lending conditions for the original product and left RBS able to deny the mortgage for legitimate reasons.

As already suggested I would do what is needed to bring the property back to a habitable state and get a mortgage elsewhere, unless you can quickly establish with RBS that their refusal is based on habitable status and they will quickly reconsider if that is addressed...

Otherwise go elsewhere for now and then if so inclined try another complaint...