cant get mortgage this time

D

danny1

Guest
Hi, I'm sick with worry. 14 months ago I signed contracts to buy a house in a new development. I got a mortgage offer but since then my employment has changed and I dont earn as much. Now I am not able to borrow as much and I'm short 40k to complete the sale. My solicitor is not much help and say's the builders can bring me to court to force me to complete. I put down 7k deposit & am willing to forget about getting any of it back. The house is now ready & I'm really stuck. My mortgage adviser has been much more supportive than the solicitor & is sending me a copy of mortgage offer, I've drawn up a letter to the builders explaining my situation and am planning to send it along with mortgage copy to prove I do not have the funds to go ahead. Has anyone else been stuck like this? Surely with the change in economy I am not the only one to find a year down the line that I now can not afford the house. Will the builder really persue it? Its a large development and the phase after mine was 25k dearer.
 
danny1 said:
My solicitor is not much help and say's the builders can bring me to court to force me to complete.
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How is this of no help when it is a possibility in this situation? Is this all that your solicitor has said about the situation or something?
I put down 7k deposit & am willing to forget about getting any of it back.
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Has your solicitor told you explicitly that walking away (and most likely losing the deposit) is not an option? Your solicitor will also still need to be paid too for services rendered to date by the way.
The house is now ready & I'm really stuck. My mortgage adviser has been much more supportive than the solicitor & is sending me a copy of mortgage offer, I've drawn up a letter to the builders explaining my situation and am planning to send it along with mortgage copy to prove I do not have the funds to go ahead.
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You probably really should be doing this through your solicitor.
 
Sorry to read about your situation. Contracts are binding but depending on whether or not there are many unsold properties in the phase you bought in, the builder may look at taking it back from you? As ClubMan pointed out this may be better if negotiated by your solicitor.

Alternatively is there anyone who could go on the mortgage with you or be a guarantor?
 
What bank are you approved with?
What rate have you been offered?

Some banks offer more money than others. Have you looked at all options?

Post your basic financial details, personal situation (married? kids?), age, amount required and purchase price of the property and i'll see if any banks will consider it.
 
bobk said:
What bank are you approved with?
What rate have you been offered?

Some banks offer more money than others. Have you looked at all options?

Post your basic financial details, personal situation (married? kids?), age, amount required and purchase price of the property and i'll see if any banks will consider it.
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surely the mortgage advisor done this???
 
danny1 said:
Hi, I'm sick with worry. 14 months ago I signed contracts to buy a house in a new development. I got a mortgage offer but since then my employment has changed and I dont earn as much. Now I am not able to borrow as much and I'm short 40k to complete the sale. My solicitor is not much help and say's the builders can bring me to court to force me to complete. I put down 7k deposit & am willing to forget about getting any of it back. The house is now ready & I'm really stuck. My mortgage adviser has been much more supportive than the solicitor & is sending me a copy of mortgage offer, I've drawn up a letter to the builders explaining my situation and am planning to send it along with mortgage copy to prove I do not have the funds to go ahead. Has anyone else been stuck like this? Surely with the change in economy I am not the only one to find a year down the line that I now can not afford the house. Will the builder really persue it? Its a large development and the phase after mine was 25k dearer.
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In reality, you can't force someone to close who doesn't have the funds. Bringing you to court and trying to force closure is pointless as you simply don't have the money. Don't send your mortgage offer to the builder, this is a private document. Also it may aid your defence.

A simple letter stating that you are unable to raise the funds to procede with the sale due to rising interest rate increases over the past 18 months and as such no longer can procede with the purchase. Do not mention your change of job. Again this is private info and unneccessary. Rising interest rates since December 2005 have serverly reduced the amount that a purchaser (ie you) can borrow so this is a true and sufficent explanation.

Leave your solicitor to deal with any legal letters etc. that may be returned by developer.
 
How much is the property worth compard to the price you are paying ?


If its more could there be a chance of some type of bridging loan while you sell....
 
jhegarty said:
How much is the property worth compard to the price you are paying ?


If its more could there be a chance of some type of bridging loan while you sell....
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I had assumed the OP was a first time buyer, no?
 
Sorry to hear about your predicament
My advice is to skip the mortgage broker and go meet with the various lending institutions. If you've had a current account or similar with one in particular for a long period of time go talk to them directly. Explain your situation and present clearly documented reasons for your ability to repay.

All lending institutions and brokers have to comply with rules associated with not lending you more money that you can possibly repay - but brokers are more likely to loose their license than some traditional institutions.

Just my suggestion but it can never hurt to go talk directly to someone. I wouldnt be in a rush to walk away from my 7k.
 
Have you tried some of the lenders who deal with Sub Prime loans?
E.g Start Mortgages? Their rates are very high but if you still want to buy it may be worth getting in contact? You have to stay with them for at least a year but at that point other banks may be prepared to lend as you will have shown your ability to repay?
 
speculative said:
Sorry to hear about your predicament
My advice is to skip the mortgage broker and go meet with the various lending institutions. If you've had a current account or similar with one in particular for a long period of time go talk to them directly. Explain your situation and present clearly documented reasons for your ability to repay.

All lending institutions and brokers have to comply with rules associated with not lending you more money that you can possibly repay - but brokers are more likely to loose their license than some traditional institutions.

Just my suggestion but it can never hurt to go talk directly to someone. I wouldnt be in a rush to walk away from my 7k.
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Brokers don't actually determine the loan amount that a person qualifies for.

In this case I would suggest that the OP should go to a reputable broker with numerous agencies. They will be familiar with each of the lender's criteria and able to advise the OP on whether or not they can borrow the amount they're looking for. This is of course assuming the OP feels they can afford the repayments and wants to proceed with the purchase.
 
Madangan said:
Have you tried some of the lenders who deal with Sub Prime loans?
E.g Start Mortgages? Their rates are very high but if you still want to buy it may be worth getting in contact? You have to stay with them for at least a year but at that point other banks may be prepared to lend as you will have shown your ability to repay?
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The OP didn't qualify for the amount they required with a prime lender because the lender felt they couldn't afford the repayments, so I can't see how they will be able to afford the extra 2%, and that's without taking future interest rate increases into account.
 
Hel said:
The OP didn't qualify for the amount they required with a prime lender because the lender felt they couldn't afford the repayments, so I can't see how they will be able to afford the extra 2%, and that's without taking future interest rate increases into account.
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Well by that logic there should be no market for sub-prime mortgages!
 
I agree it may be difficult to make the repayments but the whole point of sub prime lenders is that sometimes they will lend more than the normal banks. Obviously if he gets a loan offer from such a lender the OP would have to consider whether he can make the repayments? I merely suggested this as another option for the OP as often people only think of teh major banks when looking for loan offers.

Anyway to the OP hope it works out for you,good luck.
 
Thanks for all the feedback. I have gone to every lender I can think of but my broker got me the most. I really just want out of this situation & if that means loosing my 7k then so be it. My solicitor has sent a letter to the builders explaining my situation so I hope to hear back from her on Monday. I'll learn from this that I have to be more realistic about what I can afford in the future, once again thanks for all your reply's.
 
I didn't think that "flipping" the property was necessarily that simple and there presumably could be tax (e.g. stamp duty and CGT) implications?
 
Even if no capital gains losing the first time buyers benefit of no stamp duty is likely to be of more value than the 7000 deposit. Make sure it's only 7k you will lose and that you're not bound by contract for more. i also think given the jitters around about property at moment may have a hard time selling especially if property is new and a non first time buyer can avoid SD by purchasing one directly from the builder. Also think of estate agents fees, mortgage repayments in the meantime etc not to mention the worry.. I think i'd personally walk away.
 
Hi all,
just thought i'd update you, letters have been sent back & forth between my solicitor & the builders solicitors but we are going around in circles. Mine state that I dont have the funds to complete the sale including statement from mortgage advisers & theirs say I'm expected to close. I've said they can keep the deposit but they just write back saying to close. Unless i win the lotto i can not close! The latest is they will let me out if I give them a 'substancial sweetner' (spl?) I dont know how much they think is a 'substancial sweetner' obviously much more than the 7k i've paid. I feel as if i'm being bullied into paying out more and am very annoyed and scared that what bit of savings i have will now be gone. I've asked for this request in writting as i have a feeling it's going to be a brown envelope job and who's to say they wont want more if i pay whatever the amount is. Is this just bullying tactics or are they chancing their arm? Is this the norm? Is it legal? I'm quite shocked, if they put a request & reason why (costs of reselling, time lost etc) maybe i'd understand it more. For all i know they have drafted in another buyer allready from the next phase and are getting what they can out of me. I thought that if a sale fell through you lost the deposit and that was that, i know that a contract is a contract but some people for many reasons can not close a sale. My solicitor says it's up to me to offer this 'sweetner' but i dont know where to start. I'm at my wits end do i offer a few k or tell them i'll see them in court? (sounds brave but i'm terrified)
 
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