Mortgage offer withdrawn after exchange, can I still complete next week?

[Miffed1233]

Exchanged contracts Thursday for completion next Friday. Buyer below me and I’m buying ex rental which is at top of chain

randomly bank withdraw offer Friday afternoon, 24 hrs after exchanging)saying credit rating changed therefore affordability impacted. Have a call at 9am Saturday. Wtf absolutely nothing I can think of that would have changed and my Experian score is very strong still. Any advice - is there any way I can still complete in 6 days?!

any solicitors or bankers on here?

Even if the solicitor orders the funds before exchange the mortgage could still be withdrawn
Also solicitors can only hold mortgage funds for a short time normally 5 days

And people saying they request the money before the exchange have me a bit confused. You can't hold the money for more than a few days, so how are you requesting it a week before completion?
If you are requesting it before exchange to arrive the day (or three) before completion, that's fine. But that is no guarantee the offer won't be pulled! The lender can still pull the offer despite the future dated request.

Replying re the bridging loan comment - they wouldn’t be able to sort that in a few days for completion! It would have to be re-valued,
lots of legal work for that etc

Hope you managed to sort this today. What a shock!

Surely some oversensitive computer blip that just needs to be overridden by a human with common sense? I hope so, OP. What a horrible situation for you, not having answers over the weekend.

What I can’t get my head around is what happens to your 10% deposit?
In theory you could lose it if the bank withdraw the mortgage, right? It could be £30,60,80k. A deposit that people will likely never be able to re-establish. Can banks really do this on a whim? It seems like it should be regulated, it’s far too high risk.

OP, it will probably have been the increase in credit limit - the bank will have had to perform a hard search before increasing your limit and a hard search will always temporarily drop your credit rating.

What are you basing this on? It is information that the credit agencies pass to the bank. The bank in turn knows that this is an ability with no further checks for you to borrow up to that sum, immediately.

On what are you basing the claim that none of them use it?

You do understand don’t you that they don’t use the “credit score” that the agencies make up, so the post above linking to how one agency calculated your score is not relevant?

Not on a whim, no, but yes if there has been a change that they deem significant.

Although unlikely, and despite people asserting on the basis of nothing that it can’t form part of their decision, banks can and do look at your total available credit as part of the decision.

The number of posters immediately assuming the lawyer is at fault, demonstrates one reason why we have a massive shortage of trained conveyancers in this country due to skilled professionals leaving in their droves.

To clarify some misunderstandings on this thread, the solicitor is responsible for drawing down funds. Most lenders require approx 5 working days notice although it can be done quicker. Depending on the time lag between exchange and completion the request may be done before or after exchange, as the mortgage funds request is geared around completion date not exchange date. If there is a short turn around between exchange and completion, some solicitors will insist on at least initiating the drawdown request pre exchange so they can have the comfort of a phone call with the lender where it’s confirmed that any pre completion hoops are dealt with at the lenders end and the funds are tabled for release. It’s not a guarantee but it reduces the risks a little more. Sadly solicitors will often get jumped on for doing that too, labelled over cautious, dragging their feet or whatever. People who have no idea of the process should refrain from bashing the lawyer with no evidence whatsoever here they are at fault.

It won't be the credit limit increase. Your credit score 'rating' will actually improve if your available credit increases because you are then using a lower percentage of your available credit.

That’s not a significant change though?

I’m interested in this slightly terrifying case. You have exchanged in good faith in the basis of an agreed mortgage deal. There are financial consequences for you not being able to complete. Does the bank have to bear these? It seems too late for the bank to withdrawer.

Sorry posted too soon- what I meant was if it’s in lenders t&cs (as a poster above said) that they could do this between exchange and completion, then they could do it on a whim, since presumably no one polices under what criteria they do this.

the consequences are life changing for the borrower- losing their house deposit. It should be regulated

But can be a mistake.

The day I was completing (a week after exchange) my solicitor rang me at work to say that the purchase could not go ahead as there was no money to pay for the house.
Initially I was so upset, as my soon to be ExDH had stopped the sale numerous times, in a very difficult divorce …I blamed him BUT rang the mortgage lender (Halifax) to check what had happened.

Turns out, in those last checks, a Halifax staff member had rang my school (I am a teacher) and simply asked to speak to me. School Admin. had replied that I no longer worked there (true).

Halifax cancelled my mortgage.

What had been missed was that although I had changed schools, my employer is the council and my permanent contract was still in place. Financial and employment checks had been carried out via the council HR/payroll, the mortgage agreed.
Due to their call, Halifax assumed I was out of work and cancelled my mortgage.

Thankfully, my mortgage was reinstated within 20 minutes and I bought my new house!

So stressful. I hope there is a simple explanation for you too, @Miffed1233

@MoreAboutUs interesting that Halifax did that to you, as someone else said they were a broker and that Halifax were known for it.
I think for those of us who have never heard of this happening before after Exchange, it is a very scary thought. It can't be good for a lender's reputation to become known for withdrawing previously agreed funds at the 11th hour.
I hope OP gets it sorted in her favour quickly.

Yes. Your credit limit does have an impact on affordability the banks know you could at any time become for example 10K in debt which will affect your ability to pay the mortgage.

Also it’s correct to say lenders don’t use the credit score number they look at your whole report. Credit reference agencies made the numbers up.

So even the lender couldn’t explain the situation?!

I'd have all that pencilled in already & the packing virtually finished.

exchange & completion together is a much more sensible approach IMO

Some do, some don't.

It’s a logistical nightmare. Especially where there is a chain. And no guarantee it will all come together at all.

Thanks, yes I saw someone else say the Halifax are notorious! It was a huge panic, relocation without a house to move into on the day

(They also let my ExDH withdraw all of our children’s savings, three years after the divorce and without contacting me as a signatory - but that is another story!).

Interesting as to why most people want a gap between the two. I've always had them same day, by choice, for the reasons you outlined. Pencilked in the necessary stuff & got packed up & organised.

It doesn’t need to be “significant” if it takes the borrower from just the right side of the line to just the wrong side.

It’s a good idea to avoid any changes at all in your credit file when getting ready to complete on a house purchase that requires a mortgage.

There’s more than one post that suggests that people think the banks use the “credit score” from companies such as Experian.

As you write, they don’t. They don’t even tend to have access to it.

It’s worth remembering that one massive piece of information, your income, is not even available to the credit agencies, so your score cannot be a valid measure of whether you can afford a given size of mortgage.