Mortgage Advice, please?!

NewMummy

Hi :hello:

Newbie here, hoping someone would be able to offer a little advice.
My partner and I are looking to move home, we had a baby last year, and obviously need more space! We applied to Direct Line for a mortgage, we had the offer agreed in principle over the phone - that was after telling them I was on maternity leave, and we were infact told we could borrow 30,000£ more than what we were looking for. Our application follwed in the post, and we filled it in and sent it off with the payslips etc... (well over a week ago now) I called direct line to ensure they received our forms etc... they said they did and it's with the underwriters (who are they??!) anyway, I'm really worried that although it was agreed in principle over the phone, they may decide to decline our application. they asked me to send them a letter from my employer telling them about my post and how much I earn and when I'll be returning to work - so that went with the application. My national credit rating thing is 761 (Fair) my partner is 920 (good). we haven't put in any offers for properties as yet in case it is declined, and we have this property to sell too.

We hope to sell current property for 170,000, and buy property of 240,000. looking for mortgage of 200,000. (all fees taken into account).

it's probably a stupid question, but what are the chances of getting declined at this stage? and why am I waiting so long to hear back from them?!

Many thanks for your time.

Sam

UK007BullDog

You cannot apply for a mortgage when you have not yet found a property.

You are wasting their time and yours. Before they offer the mortgage to you they need to survey the property you want to buy. No survey, no property details no mortgage.

Please clarify this.

ams_nottingham

Hi Sam,

An underwriter is the person who agrees to lend you the money on behalf of the lender (Direct Line). A decision in principle is merely a loose agreement based on the initial information you supplied - subject to further checks and confirmation of the info you originally supplied. They can decline the offer at any time if checks at a later stage reveal something they're not happy with.

Hope this helps

NewMummy

UK007BullDog wrote: »

You cannot apply for a mortgage when you have not yet found a property.

You are wasting their time and yours. Before they offer the mortgage to you they need to survey the property you want to buy. No survey, no property details no mortgage.

Please clarify this.

they already know I haven't found the property yet, they said I have 3 months from the quote coming through to find the property. if I don't find it, I have to be re-assessed.
How can anyone put an offer in for a house, and not have the mortgage guaranteed? thanks though.

UK007BullDog

Because you should know your income and your means of being able to repay. So unless you have a poor or very poor credit record they will decline you and you should then visit a broker.

So, you now have to find a property ASAP. They will tell you if you find a property they will go ahead, if it comes back ok on the survey. If you do not find a property you will lose your product fee, even if added to the mortgage as far as I know as you broke the contract, so might still charge you for that.

NewMummy

thanks,

I just phoned them, apparantly they send confirmation of application form back, and clarify the quote etc... which is subject to valuation of the property I'm looking at, and they are confirming that by doing checks and looking at our supporting documents that they would give us the mortgage. The guy said they keep the mortage on file and I update them with the address I'm interested in. He also said that to have a mortage agreed in principle that means they would have done credit checks already?? does that sound correct?

ETA: if I don't find my property within 3 months, all I have to pay is the reservation fee. I asked him that too. so I don't need to pay additional costs.

UK007BullDog

You are willing to lose a reservation fee in case you cannot find a property. That really is not money saving. But I wish you luck and that you find a property really quickly.