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  • FIRST POST
    • 3miry
    • By 3miry 15th May 18, 6:44 PM
    • 2Posts
    • 0Thanks
    3miry
    Mortgage extension/reapplying
    • #1
    • 15th May 18, 6:44 PM
    Mortgage extension/reapplying 15th May 18 at 6:44 PM
    Hi there

    What a nightmare of a 6 months this FTB experience has been for me and my partner. Our sellers solicitor have been so slow in responding to enquiries from our solicitor (if they answer at all) it has all dragged out to the 13th hour. I made sure all parties were aware our mortgage offer was due to expire on the 15th may and therefore we need to complete before then.

    It nearly happened. We were all set to exchange and complete yesterday after rushing through the final paperwork. Then I noticed nowhere mentioned a £500 ďallowance on completionĒ which had been agreed back in March because of some property damage. The funds had already been received from our lender in anticipation of completion on 14th may. I noticed this on the Friday beforehand and after spending all day trying to negotiate another way of getting the damage reimbursed or repaired we were left being told an allowance on completion was the only option and therefore our solicitor needs to send the funds back and request an extension from the lender.

    Normally I would have let £500 slide (it was for criminal damage to the fence and summerhouse - likely because the length of time the property was stood vacant). However we had also noticed further damage to the property had been done to the French doors at the rear meaning the property was no longer secure. The sellers flatly refused to repair or make any further allowance for this damage, and we couldnít move into a property that was not secure (weíre FTB and simply donít have the funds to repair this ourselves and our building insurance only covers from the date of exchange). So this £500 is really important to us.

    Our solicitor returned the funds on Friday and faxed a request for extension on Monday. I called our lenders today who confirmed even though the fax was marked urgent, it was still sat in an inbox and as nobody had verbally alerted them they hadnít escalated it. I was told my solicitor needed to urgently send through a certificate of title plus a request for extension today. Our solicitor said she cannot send the certificate of title until the lender agrees on the allowance. Our brokers also got involved and said the allowance would increase our LTV to over 95% so we would need to add £900 more deposit (donít know how they got that figure). Our solicitor said no, thatís not how it works, as itís not a reduction to purchase price. Nationwide (our lender) said thereís nothing they can do about it, but they will grant a 14 day grace period provided they receive the certificate of title today.

    Iíve been trying to call my solicitor all day (she doesnít work Tuesdays so itís being dealt with by her secretary) and I havenít managed to get through to her for an update on whether this actually got sent or not. Iím so frustrated as it seems like nobody is talking to each other and itís so exhausting being the middle man. I think it probably hasnít been sent and that leaves us with just one option which is to reapply for the mortgages.

    Itís a 95% LTV mortgage so what Iím asking you guys is has the market changed in the last 6 months in a way we should be aware of? Are we more or less likely to be approved? We have both been promoted since we last applied and earn £10k pa more. We havenít taken out any new debts but have both recently got mobile phones which has dropped my ďcredit scoreĒ like a stone due to so many searches (itís only been 3 in the last 12 months and one was my first mortgage application!). Just looking for a bit of reassurance as my broker sounded very negative about reapplying last time I spoke to them and said I just just forget about the £500 - although I see why they want me to just hurry and complete as they want their commission!

    Help please!
Page 1
    • kingstreet
    • By kingstreet 16th May 18, 10:34 AM
    • 33,393 Posts
    • 18,076 Thanks
    kingstreet
    • #2
    • 16th May 18, 10:34 AM
    • #2
    • 16th May 18, 10:34 AM
    An "allowance on completion" is effectively a vendor incentive, must be referred to the surveyor and will probably be deducted from the valuation (your mortgage is based on 95% of the purchase price or valuation whichever is the lower).

    That means the process is more involved and why you will need to increase your deposit.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • 3miry
    • By 3miry 16th May 18, 3:38 PM
    • 2 Posts
    • 0 Thanks
    3miry
    • #3
    • 16th May 18, 3:38 PM
    • #3
    • 16th May 18, 3:38 PM
    Thanks for the reply.

    It just doesnít make sense to me, my estate agent, or my solicitor as to how an ďincentiveĒ or ďallowanceĒ would actually cost us more to borrow.

    The agreed purchase price is 126000 and our deposit is £6300 (so loan is £119700) at the moment.

    Thanks
    • kingstreet
    • By kingstreet 16th May 18, 3:51 PM
    • 33,393 Posts
    • 18,076 Thanks
    kingstreet
    • #4
    • 16th May 18, 3:51 PM
    • #4
    • 16th May 18, 3:51 PM
    The agreed purchase price is £126,000 but the valuation will now be £125,500.

    You can borrow 95% of the lower of purchase price, or valuation.

    You will be able to borrow 95% of that, £119,225 so your minimum deposit should now be £6,775.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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