Mortgage offer withdrawn after exchange, can I still complete next week?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

Solicitors don’t draw down funds unless a completion date is set I.e after exchange, not before, unless it’s a simultaneous. If you don’t know, you shouldn’t give advice on a situation like this.

Done the job for 23 years - this is unheard of.

Completion date is set at exchange, not after exchange.

A CC being raised will instantly make your credit report drop...That's why I never accept the raise or if they automatically raise I ring to cancel it to what I'm happy with

That’s right - the completion date goes in the contract (unless it’s new build and completion is on notice). User 3353 was saying that we exchange, then submit the COT. Which is standard (unless there’s only a short time between x and comp in which case we can submit the COT earlier but it’s a ballache if the comp date is then shunted back and funds need to be cancelled or returned).

Oh goodness what a worry. We had similar about 10 years ago. Not what you want to hear but we unfortunately lost the house we originally wanted.

We got to the bottom of it and when the mortgage advisor was putting in the application she accidentally put in our bills 3 times so our affordability dropped massively!!

This also left a mark on our credit file and we had to wait 6 months for it to fall off so we could start looking to buy again. Was all very stressful!!

I’m so sorry. How awful. I hope you were compensated somehow. That sound horrendous

This post has been shared on Facebook and someone commented that their credit score dropped after they'd paid out for something on their credit card but hadn't paid the cash back to it when the new credit check was done. Have you made a purchase on another card recently or from another account that might have affected it?

We were, but no where near what we lost. Thankfully 6 months later a family member offered their house as they were downsizing. Managed to gut the whole house and start from scratch

Exactly this. Had it in 2023 - exchanged contracts. Ordered funds from Santander straight away (to arrive the day before completion - which was four weeks away). All acknowledged. Two days before completion. (A day before funds were due) got an alert from lender and they’d withdrawn the mortgage offer.
These things do happen. Client had ordered a sofa on credit to be delivered to new house. So lender withdrew offer.

As this sort of thing seems to be more common than anyone realised, surely potential borrowers should be warned about about any pre-completion buying/borrowing?

Every conveyancer I have worked with would have submitted a COT and had confirmation that funds would be released prior to exchange.

the mortgage brokers I work for reiterate to clients time and time again please don’t make any big purchases, take out any finance agreements etc etc.

Unfortunately, people think a £20 a month sofa on 0% doesn’t count, or just get swept up in the excitement of buying their first home, which is understandable, but we do ask them not to. I would assume other brokers do the same.

No mortgage broker has ever said that to me.

Last time I moved I ordered a sofa between exchange and completion, on my credit card of course. I can see how someone would take up a shop’s finance deal too. I’d have thought sofa between exchange and completion is very very normal.

Scary stuff and I hope you get it sorted OP.

I now understand why people do exchange and completion simultaneously, I always thought that was high risk.

You can submit a CoT but the lender can still pull the offer.
This has been covered several times in this thread.

I’d kind of love this to happen though - you’d get to keep the deposit and the house!

Your credit score doesn’t drop because you buy something on your credit card

This would potentially make a differences if your affordability is marginal but you have to consider that for most people it really wouldn’t. MN tends to be a middle aged audience, you would expect that group to be borrowing maximum affordability and they likely have had 20 years paying off their mortgages already. This group of people wouldn’t be impacted by buying something on credit between exchange and completion.

Notwithstanding that banks may say they can do this in their ts and cs they really shouldn't unless something massive happens in the interim and really should be made to hold their offer for as long as the duration states, when you consider the implications.

I really hope it's an error and can be sorted quickly.

I had an email from my credit card saying my payment was late the other day. Immediately went on my account and the payment had gone in as normal (direct debit) and on time. Got on their chat and it was a complete error on their part.

Lucky I'm not trying to draw down a mortgage really, isn't it?

Not if you do exchange and completion on the same day. Our chain was forced into it last time by the top and it was unnecessarily stressful. The top were twats and we all honestly thought they refused earlier exchange because they were about to back out. Everyone was ready to exchange week before. It's not cheap to pay removals for nothing.

oh sorry didn’t realise it had fallen through before any of it had taken place

Wouldn’t expect that group to be borrowing maxiumum affordability

Not sure how that would work. No deposits were paid because people pulled out before monies were transferred. For the people whose buyer pulled out, it meant they lost their house and the ones whose vendor pulled out were homeless as their sale had completed.

I do remember warning my step-son not to take out any additional borrowing of any sort once the mortgage was agreed as the mortgage company could do another credit check at any time before completion (and they were at their borrowing limit). However I think this is really tough on buyers as the purchase process is so long drawn out in this country.

Two points on this.

Yes it can, the credit agencies have all manner of algorithms working on your score and taking out more credit is obviously something that can affect your score.

The lender does not see the score that you get from the credit agency, they see the contents of your file and base their decision on that and in other factors. The absolutely can change their decision to lend if you take on extra credit somewhere else.

They wouldn't be homeless because none of the transactions in the chain would have taken place. No-one would have completed so everyone stays where there were without losing their deposit.