Halifax went back on mortgage offer

md2897

Hi my daughter and her boyfriend were offered a mortgage with Halifax put an offer on a house which was excepted, The advisor from the estate agents have been fobbed off for the last week with different excuses, asked to speak to a manager who admitted delaying their mortgage going through and now wants not £5,000 deposit but £13,000 and blamed Northern Rock Issue can this be legal surely that had a verbal agreement? Is there anything they can do? any help will be greately received. Oh would you believe they even offered them a bigger mortgage if they wanted one. :mad:

DrFluffy

That's the problem with 'in principle' agreements...

Have they said they will take their custom elsewhere etc?

clutton_2

this demand for an increase in deposit could be that their surveyor downvalued the asking price by £8k therefore the house is worth less than they thought. Ask to see the surveyors report. if this is the scenario there is nothing you can do, except to try to get a mortgage broker to get you a mortgage elsewhere and hope that another valuer may upvalue, but - there is no guarantee and you will have to pay another valuation fee.

md2897

Yes, If they get nowhere with them I've told them to stand outside the branch and tell everyone not to get a mortgage with them. See how they like bad publicity.

DrFluffy

md2897 wrote: »

Yes, If they get nowhere with them I've told them to stand outside the branch and tell everyone not to get a mortgage with them. See how they like bad publicity.

I doubt they will care to be honest

Debt_Free_Chick

Unfortunately, the only thing you can rely on is a written mortgage offer complete with all the terms and conditions. Even then, it might be valid for only a few days.

Mortgage products can be withdrawn at any time and if you don't have the written offer, you haven't a leg to stand on.

Sorry ...

BenL

A similar thing happened with my brother and his apartment.

It was getting close to exchange and completion and the lender decided they would only lend 90% instead of the 95% that had been discussed and offered in principle.

A whip-round of the family was needed to help him out and cover the other 5%.

I'm not sure why the offer was changed, maybe just a product change.

WTF?_2

BenL wrote: »

A similar thing happened with my brother and his apartment.

It was getting close to exchange and completion and the lender decided they would only lend 90% instead of the 95% that had been discussed and offered in principle.

A whip-round of the family was needed to help him out and cover the other 5%.

I'm not sure why the offer was changed, maybe just a product change.

The bank is lending a lot of money. It wants to minimise the risk of losing it so it will only lend a percentage of the value (the Loan To Value, LTV) so that the borrower stands to take the brunt of any price drops.


In a climate of ever-rising prices, mortgage lenders usually get lax to the point where they give out loans of >90% LTV as hey, the economy is going good and prices are rocketing so what do they have to lose? Getting your business in and increasing his annual bonus is the priority for the assessor.

With the market likely to deteriorate, lenders are insisting on a lower LTV in order to cover themselves against price drops should they have to repossess their asset (ie your house). In other words, as the price drops below what the buyer paid it's their money that is being 'lost' and not the bank's. Hence a repossession should mean they get all their cash back.

Unless prices really drop of course, but we all know that could never happen since property is such a surefire one-way bet.

mr.broderick

!!!!!!? wrote: »

The bank is lending a lot of money. It wants to minimise the risk of losing it so it will only lend a percentage of the value (the Loan To Value, LTV) so that the borrower stands to take the brunt of any price drops.


In a climate of ever-rising prices, mortgage lenders usually get lax to the point where they give out loans of >90% LTV as hey, the economy is going good and prices are rocketing so what do they have to lose? Getting your business in and increasing his annual bonus is the priority for the assessor.

With the market likely to deteriorate, lenders are insisting on a lower LTV in order to cover themselves against price drops should they have to repossess their asset (ie your house). In other words, as the price drops below what the buyer paid it's their money that is being 'lost' and not the bank's. Hence a repossession should mean they get all their cash back.

Unless prices really drop of course, but we all know that could never happen since property is such a surefire one-way bet.

Thats a nice helpful post.
Not sure property is such a surefire bet but until joining this network i never realised how desperate people were to buy a house hence the will for price correction to enable them to do this.It's strange how us in the uk buck the trend in europe and really crave home ownership.

macaque_2

md2897 wrote: »

Hi my daughter and her boyfriend were offered a mortgage with Halifax put an offer on a house which was excepted, The advisor from the estate agents have been fobbed off for the last week with different excuses, asked to speak to a manager who admitted delaying their mortgage going through and now wants not £5,000 deposit but £13,000 and blamed Northern Rock Issue can this be legal surely that had a verbal agreement? Is there anything they can do? any help will be greately received. Oh would you believe they even offered them a bigger mortgage if they wanted one. :mad:

The lender probably made their decision in happier times. It is harsh but this happens when major shifts in market sentiment occur. Your daughter should count herself lucky. Some people are losing huge deposits because lenders are changing their minds after exchange of contracts.

Rather than complain about it, you and your daughter should take a leaf from Halifax's book and take a long hard look at the tea leaves in the bottom of the cup. These are very turbulent times in the property market.

Rover

Wise words indeed.