I've ordered a sofa and mattress on finance before completion (after exchange)...

Dumbo1986

Needless to say I feel stupid and am absolutely petrified of the possibly repercussions.

For some context – we exchanged contracts on Thu 11th July with a completion date of Wed 31st July. Wife and I in our excitement started thinking how we’d furnish the place (we’re coming from a furnished rental) so went mattress and sofa shopping. Having slept and sat on what might be the most uncomfortable things for the last 3 years, we decided to treat ourselves. We have a sofa that we’ll pay off over 36 months at £50 a month, and a mattress we’ll pay off over 9 months at £60 a month (£250 deposit paid for mattress). Total cost for them both is roughly £1,600 and £900. No payments taken yet, won’t be until mid-August, but I understand the credit check has been done and that’s what’ll matter to our lender, Nationwide.

Is it simply the transaction that will cause the problems or will the lender investigate the nature of it? We obviously haven’t gone outside of our affordability with these things (I know the bank may think differently). I got a pay rise last week taking me from £44k to £51k, which I’m hoping might have come at a perfect time.

I’ve obviously sent an email to our mortgage advisor this morning but haven’t heard back and am beside myself with worry. What’s incredible is that my advisor nor my solicitor said anything about making any purchases on credit in the interim. I checked my mortgage offer from Nationwide and it doesn’t say anything either. By some dumb luck I stumbled upon a Reddit thread and it set alarms bells ringing.

We have had a quick turnaround from Nationwide before – the price of the house changed at one point in the process and we had a revised offer from them within a few days.

For more context, we were told we could borrow up to £400k and for this house purchase we are borrowing £370k, so quite close to our limit. My pay rise would put this borrowing up slightly though.

Any advice is welcome. Thanks.

amnblog

Not smart - but it is very unlikely in your case that it will cause a problem.

No more please

Dumbo1986

My mortgage advisor will likely inform the lender, correct? Would they likely have to go back to the drawing board or will they say the amounts are low enough that it's all ok. Would that usually be how it pans out?

Never again! I've never been so terrified of anything in my life. My wife is pregnant, our flat has tenants lined up and we've paid our exit fee. We'd be homeless and £45k poorer. I can't even imagine...

Flugelhorn

I hope it sorts out OK for you - could put you in a tricky position with having exchanged if  you are then unable to complete - I doubt they will do this though.

Best not to do it again!  

kempiejon

Just so I'm clear, if a mortgage offer has been made, those borrowing cannot buy anything or use credit until after they completed on the purchase. Shows either or both how little I know or crazy the rules around mortgages are. A lender could potentially pull an offer if the borrower uses credit before they complete on the house.

BarelySentientAI

Dumbo1986 said:

What’s incredible is that my advisor nor my solicitor said anything about making any purchases on credit in the interim. I checked my mortgage offer from Nationwide and it doesn’t say anything either. By some dumb luck I stumbled upon a Reddit thread and it set alarms bells ringing.

It really shouldn't need your advisor, solicitor or lender to say "don't take out extra credit while you are getting a mortgage".

Having said that, it isn't the first time your situation has come up on these boards so perhaps it isn't so obvious to everyone.

As far as I can recall, they all worked out fine.  Next time, just wait until after you've moved in though?  Waiting an extra few days for your sofa is easier than the stress.

Dumbo1986

I think just don't put anything on finance, or don't get any loans out. You can of course continue to buy things with your debit and credit cards (if it's still getting paid off monthly). 

As far as I'm aware.

What's incredible is that no one told me through the process. Luckily it's only the mattress and sofa we've bought. We almost got a carpet and a fridge on finance too...

Dumbo1986

BarelySentientAI said:

Dumbo1986 said:

What’s incredible is that my advisor nor my solicitor said anything about making any purchases on credit in the interim. I checked my mortgage offer from Nationwide and it doesn’t say anything either. By some dumb luck I stumbled upon a Reddit thread and it set alarms bells ringing.

It really shouldn't need your advisor, solicitor or lender to say "don't take out extra credit while you are getting a mortgage".

Having said that, it isn't the first time your situation has come up on these boards so perhaps it isn't so obvious to everyone.

As far as I can recall, they all worked out fine.  Next time, just wait until after you've moved in though?  Waiting an extra few days for your sofa is easier than the stress.

I guess this is something that we're not used to, as a FTB and coming from the renting world. Paying an extra £50 each (wife and I) for a sofa and a mattress will hardly affect us in the slightest, yet here I am reading that it's not beyond the realm of possibility that it could potentially end our dreams of owning a home (and also mess it up for the people further down the chain). 

Flugelhorn

Dumbo1986 said:

BarelySentientAI said:

Dumbo1986 said:

What’s incredible is that my advisor nor my solicitor said anything about making any purchases on credit in the interim. I checked my mortgage offer from Nationwide and it doesn’t say anything either. By some dumb luck I stumbled upon a Reddit thread and it set alarms bells ringing.

It really shouldn't need your advisor, solicitor or lender to say "don't take out extra credit while you are getting a mortgage".

Having said that, it isn't the first time your situation has come up on these boards so perhaps it isn't so obvious to everyone.

As far as I can recall, they all worked out fine.  Next time, just wait until after you've moved in though?  Waiting an extra few days for your sofa is easier than the stress.

I guess this is something that we're not used to, as a FTB and coming from the renting world. Paying an extra £50 each (wife and I) for a sofa and a mattress will hardly affect us in the slightest, yet here I am reading that it's not beyond the realm of possibility that it could potentially end our dreams of owning a home (and also mess it up for the people further down the chain). 

the thing maybe another time would be to save up before moving so that you can get these things out of cash, particularly if the extra £50 each is going spare. 

as i say hoping all sorts out but just be wary that failing to complete can cost you a lot lot more than just the deposit

Dumbo1986

BarelySentientAI said:

Dumbo1986 said:

What’s incredible is that my advisor nor my solicitor said anything about making any purchases on credit in the interim. I checked my mortgage offer from Nationwide and it doesn’t say anything either. By some dumb luck I stumbled upon a Reddit thread and it set alarms bells ringing.

It really shouldn't need your advisor, solicitor or lender to say "don't take out extra credit while you are getting a mortgage".

Having said that, it isn't the first time your situation has come up on these boards so perhaps it isn't so obvious to everyone.

As far as I can recall, they all worked out fine.  Next time, just wait until after you've moved in though?  Waiting an extra few days for your sofa is easier than the stress.

Just to add, it should need our advisor and/or solicitor to say this, as that's what they're paid for. My wife and I have £2,500 left as cash to save/spend once we're done paying to survive for the month. Like I said, an extra £100 a month between us isn't exactly going to see us struggling to pay our mortgage so we didn't even really think about it. Our mortgage payments will be exactly the same as our rent, so we know what we can and can't afford.

And also, we have been saving up before moving, for years and years! This is literally the first two items in our lives we've put on credit. If failing to complete costs us more than the deposit then we might as well just find the nearest tall building...

Phoenix72

Dumbo1986 said:

BarelySentientAI said:

Dumbo1986 said:

What’s incredible is that my advisor nor my solicitor said anything about making any purchases on credit in the interim. I checked my mortgage offer from Nationwide and it doesn’t say anything either. By some dumb luck I stumbled upon a Reddit thread and it set alarms bells ringing.

It really shouldn't need your advisor, solicitor or lender to say "don't take out extra credit while you are getting a mortgage".

Having said that, it isn't the first time your situation has come up on these boards so perhaps it isn't so obvious to everyone.

As far as I can recall, they all worked out fine.  Next time, just wait until after you've moved in though?  Waiting an extra few days for your sofa is easier than the stress.

Just to add, it should need our advisor and/or solicitor to say this, as that's what they're paid for. My wife and I have £2,500 left as cash to save/spend once we're done paying to survive for the month. Like I said, an extra £100 a month between us isn't exactly going to see us struggling to pay our mortgage so we didn't even really think about it. Our mortgage payments will be exactly the same as our rent, so we know what we can and can't afford.

And also, we have been saving up before moving, for years and years! This is literally the first two items in our lives we've put on credit. If failing to complete costs us more than the deposit then we might as well just find the nearest tall building...

It's for the lender to decide what you can afford and they assessed your application on your stated outgoings at the time which you have now increased.

As others have said hopefully this has no impact.