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

Dumbo1986

Flugelhorn said:

Dumbo1986 said:

Flugelhorn said:

Dumbo1986 said:

Flugelhorn said:

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...

seriously if you have £2.5K left at the end of the month, why did you get credit for these items?

Because our cash flow at the moment is incredibly small after paying for all the expenses that come with buying a property. We wanted to have nice things after living in rentals for the last 10 years and living on other people's !!!!!! furniture. Paying £150 a month for new sofas, mattress, fridge and carpet seemed a lot more sensible to us than paying £5k upfront (which would take us months to save). The house needs some TLC.

sorry I don't quite understand - if you have 2.5K left as cash to spend / save at the end of each month then it would have only taken 2 months to save up the £5K for all the things you wanted to put into the new house

I'm sorry, I don't quite understand how you don't understand. We don't want to live on boiled rice for 2 months and we also want to start building a savings pot again. Surely you can see the logic in paying £150 a month for 9 months over £5k in one whack? I'm baffled how someone with 6k posts on a money forum cannot see the logic to buy a few things on interest free finance.

why wouldn't I buy on credit?  because there is no such thing as a free lunch... or for that matter free finance! As you are now finding out.. 

sorry I misunderstood about having £2.5K spare to save or spend at the end of the month - I assumed this was genuinely spare and not needed for any other day to day expenditures 

Actually the boiled rice comment was wrong. I had factored in eating healthy food too. But I hadn't factored in going out, seeing friends etc. 

I'm sorry, why is it not free finance? If I had bought the sofa on finance a few weeks later like a sensible chap what would have been the caveat? I thought my fault here was timing, not timing and taking out interest free finance.

Dumbo1986

ecraig said:

Dumbo1986 said:

Flugelhorn said:

Dumbo1986 said:

Flugelhorn said:

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...

seriously if you have £2.5K left at the end of the month, why did you get credit for these items?

Because our cash flow at the moment is incredibly small after paying for all the expenses that come with buying a property. We wanted to have nice things after living in rentals for the last 10 years and living on other people's !!!!!! furniture. Paying £150 a month for new sofas, mattress, fridge and carpet seemed a lot more sensible to us than paying £5k upfront (which would take us months to save). The house needs some TLC.

sorry I don't quite understand - if you have 2.5K left as cash to spend / save at the end of each month then it would have only taken 2 months to save up the £5K for all the things you wanted to put into the new house

I'm sorry, I don't quite understand how you don't understand. We don't want to live on boiled rice for 2 months and we also want to start building a savings pot again. Surely you can see the logic in paying £150 a month for 9 months over £5k in one whack? I'm baffled how someone with 6k posts on a money forum cannot see the logic to buy a few things on interest free finance.

Your maths don’t make any sense. 

£150 pm for 9 months is £1350. 

Where’s does this £5k come from?

Maybe I didn't explain very well. Sofa + mattress + carpet = £3,800 up front or £150 on finance (it'll be 9 months of £150 then two more years of £50 a month (sofa)). We didn't get the carpet as need to measure properly. The other £800 is a fridge which I bought, by dumb luck, with Clear pay (pay off over four weeks), not on finance. I rounded up slightly.We are basically up fronting the fridge and a washing machine. So £1.2k'ish up front and the rest on credit.

Dumbo1986

propertyhunter said:

This thread is not going to help the OP if we keep discussing the fact the decision was not a good one when they know this. If they recalculate the affordability, and you do indeed have £2500 in headroom/disposable income, you have to hope the underwriter will be understanding. They should see the borrowing is for £5k on the credit report and typically what it is for. 

It depends on whether you have a final credit check before completion - I had to ask the bank I was getting a mortgage with a while back about this because I had my identity stolen before completion and was worried about the implications. They said they don't normally do a credit check, unless they have a reason to do so (change of circumstances brought to their attention). 

You'd hope so... anyway, doesn't my broker have an obligation to inform my lender now that I've told them? So whether or not they do a final credit check is rather redundant, no? My hope now is they do another assessment and it's favourable, within the eight days before completion?

Dumbo1986

propertyhunter said:

This thread is not going to help the OP if we keep discussing the fact the decision was not a good one when they know this. If they recalculate the affordability, and you do indeed have £2500 in headroom/disposable income, you have to hope the underwriter will be understanding. They should see the borrowing is for £5k on the credit report and typically what it is for. 

It depends on whether you have a final credit check before completion - I had to ask the bank I was getting a mortgage with a while back about this because I had my identity stolen before completion and was worried about the implications. They said they don't normally do a credit check, unless they have a reason to do so (change of circumstances brought to their attention). 

Also, if we strip everything back and only pay mortgage, bills and eat, then we have £3k left between us. Nationwide don't know we have Netflix, Amazon, go to the gym etc. That £2.5k I said before included all of that.

BarelySentientAI

Dumbo1986 said:

propertyhunter said:

This thread is not going to help the OP if we keep discussing the fact the decision was not a good one when they know this. If they recalculate the affordability, and you do indeed have £2500 in headroom/disposable income, you have to hope the underwriter will be understanding. They should see the borrowing is for £5k on the credit report and typically what it is for. 

It depends on whether you have a final credit check before completion - I had to ask the bank I was getting a mortgage with a while back about this because I had my identity stolen before completion and was worried about the implications. They said they don't normally do a credit check, unless they have a reason to do so (change of circumstances brought to their attention). 

You'd hope so... anyway, doesn't my broker have an obligation to inform my lender now that I've told them? So whether or not they do a final credit check is rather redundant, no? My hope now is they do another assessment and it's favourable, within the eight days before completion?

I'm not sure if your broker has to tell the lender or not, it might depend on if they consider it a material change to the information that they provided - in which case they should also mention the pay rise that you've told them about as well.  Has the broker mentioned anything to you about what they will do with the info yet?

You've added £5k of exposure but £7k of income - any sensible underwriter should see that it's not a problem at all.

I'd even lean towards Nationwide not noticing.

Dumbo1986

BarelySentientAI said:

Dumbo1986 said:

propertyhunter said:

This thread is not going to help the OP if we keep discussing the fact the decision was not a good one when they know this. If they recalculate the affordability, and you do indeed have £2500 in headroom/disposable income, you have to hope the underwriter will be understanding. They should see the borrowing is for £5k on the credit report and typically what it is for. 

It depends on whether you have a final credit check before completion - I had to ask the bank I was getting a mortgage with a while back about this because I had my identity stolen before completion and was worried about the implications. They said they don't normally do a credit check, unless they have a reason to do so (change of circumstances brought to their attention). 

You'd hope so... anyway, doesn't my broker have an obligation to inform my lender now that I've told them? So whether or not they do a final credit check is rather redundant, no? My hope now is they do another assessment and it's favourable, within the eight days before completion?

I'm not sure if your broker has to tell the lender or not, it might depend on if they consider it a material change to the information that they provided - in which case they should also mention the pay rise that you've told them about as well.  Has the broker mentioned anything to you about what they will do with the info yet?

You've added £5k of exposure but £7k of income - any sensible underwriter should see that it's not a problem at all.

I'd even lean towards Nationwide not noticing.

Appreciate the soothing words. They haven't gotten back to me yet. It's with Moneybox so everything has been done over email. Might have to search for a # soon.

propertyhunter

I'm hoping you will be fine. It's less about Netflix, Amazon etc. but your committed spending. Debt repayment is a committed spend (it's not discretionary). Your disposable income on paper suggests you should be ok.

It's a life lesson - just remember for when it comes to remortgaging once this deal expires - mainly to avoid the sleepless nights. 

Dumbo1986

propertyhunter said:

I'm hoping you will be fine. It's less about Netflix, Amazon etc. but your committed spending. Debt repayment is a committed spend (it's not discretionary). Your disposable income on paper suggests you should be ok.

It's a life lesson - just remember for when it comes to remortgaging once this deal expires - mainly to avoid the sleepless nights. 

Fair. Surely there are options though if the lender didn't like it - family/friends stepping in to pay it off, us cancelling the item. Why has no one suggested these. My broker isn't giving me much - 

"As there has been a change to your financial circumstances, we will have to make Nationwide aware.

They may carry out another credit check to make sure you still meet their score requirements and they will check that the mortgage is still affordable based on your additional outgoings.
​
Once this has been reviewed, they will then confirm they are happy to still offer you the mortgage.

If you cancel the agreements now, the new finance agreements may be showing on your credit file. A mortgage lender does have the right to recredit score you at any point, so if Nationwide decide to do this, he new credit will be flagged to them.

What would you like to do?"

I'm not even sure they're giving me an option of anything, so I found their question of what would I like to do strange...

MWT

Dumbo1986 said:

I'm not even sure they're giving me an option of anything, so I found their question of what would I like to do strange...

They seem to be suggesting that if you cancel the agreements now they will not have to alert the lender to the change, but even if you do cancel, the lender might of their own volition decide to run another check and there is no certainty that they would not see the new agreements on your file anyway.

Dumbo1986

MWT said:

Dumbo1986 said:

I'm not even sure they're giving me an option of anything, so I found their question of what would I like to do strange...

They seem to be suggesting that if you cancel the agreements now they will not have to alert the lender to the change, but even if you do cancel, the lender might of their own volition decide to run another check and there is no certainty that they would not see the new agreements on your file anyway.

Yes you're right, that's what she meant. I asked her which one is more likely to secure me the house. Continue with the credit or cancel it (I have a 14 day cooling off period still valid). She's asking me what I want to do but not really advising. Is it better to inform Nationwide and wait for an answer (I don't even have a payslip with my increased salary and won't until it's too late) or cancel the credit. Even if Nationwide investigate surely they'll see that yes, I took out credit, but then I cancelled it? I just want to understand what Nationwide might possibly do and how long it might take.