What would you do if the Mortgage Company pulled out after exchange?

chriz1000

That’s a relief. Do mortgage companies credit check you twice then? I haven’t taken out any new loans or credit cards, however I have spent about £5k on carpets sofas and white appliances for the new house which has all gone onto a credit card for now. Should I have waited for completion before doing this?

Jorgan_2

The solicitor has to do bankruptcy searches on behalf of the lender, the fact that you have borrowed a bit more money shouldn't affect things for you.

Debt_Free_Chick

Jorgan wrote: »

Story tellers on the internet! Whatever next?:D

OT but ... an MSEr has a brilliant signature along the lines of "everything you need to know can be found on the internet. And some of it is even true" :rotfl:

Debt_Free_Chick

Any firm mortgage offer I've had has been "guaranteed" for about 3 months. Of course, "the times they are a-changing" and this might not be the case today ..... but a firm offer that didn't allow you to complete within a reasonable time .....? Well, it ain't an offer at all, is it?

Having said that, I also have an offer in principle in front of me for borrowing of £410k. Currently, I earn £42k .......

There is an explanation, but it only serves to prove that an offer in principle is completely worthless. I provided no proof of income and wasn't credit checked. If you're selling .... be warned!

MadSebW

Until the keys are in your hands, a mortgage offer is never 100% But it's very unusual for them to pull out with no real reason to do so. I'm panicking all the time that our's will be taken away after exchanging. Only because when i asked my advisor if the offer is 100% he said no and told me had a lender pull from one of his clients 3 days before completeion just before Xmas. So i am a bit nervous. But it's just one of those risks.. Everybody getting a mortgage faces the same risk, and if we were put off because of it, then we would all be worse off and homeless.
If our offer is taken back, i'll look at it as a blessing because i'll hope they had real reason for it and if it was just because of the credit crunch, i'll see it as something better round the corner and continue to rent until things pick up again.

fatboy24

Mortgage offers can be pulled at any time! offers have been pulled due to the lender not having enough funds (yes they should be earmarked but lenders make mistakes). One lender actually states on their offers, "if they believe your circumstances have changed they can withdraw the offer", so if that belief is wrong and your circumstances have not changed they can still pull the offer. It is a safety net for the lender so that they do not have to lend if they choose not to. Most people are not aware of this or do not understand the risks or choose to ignore the risk. 5 years ago it never really happened, now it is a serious consideration and personally you should only instruct your lawyer to exchange contracts once they have drawn down the actual funds and hold them (this should be done the day before you move).

chriz1000 wrote: »

I’ve heard a lot of people mention mortgage companies withdrawing offers after exchanging. I’m surprised we haven’t heard a lot more from these people as I would scream to the high heavens if I lost over £20,000 because the lender changed its mind.
Are people worried about mortgage companies pulling out at the last second? I’m self employed and completing in 2 weeks time, it has certainly crossed my mind. Imagine you have given up your rented accommodation, plowed all your savings into your deposit, stamp duty and fees and are left with nothing. What could you do about it? Surely you are entitled to some compensation?