Does this mean buyer will can have a mortgage under new regulations?

[starfish4]

The buyer at the bottom of the chain was refused a mortgage under the new regulations. He's applied elsewhere and apparently is having a mortgage valuation done tomorrow. Does this mean this mortgage company are willing to give him a mortgage under the new regulations or do they now consider if he's suitable after they've looked at the property?

Our mortgage company did the house valuation after we'd had an acceptance in principle under the new regulations, but before we'd got our actual mortgage offer. So although it sounds hopeful, it isn't necessarily definite - depends on the company. You might not find out for certain for a few weeks as some of the mortgage companies are taking a long time to wade through all the new paperwork.

I don't see what a valuation has to do with it. That is purely to say what the house is worth, nothing to do with whether he can actually get a mortgage.

I had a phone call this morning. We have been turned down. We only want to borrow 45k, 2 and a quarter of DH's wages but they have decided that our outgoings are too much! We barely spend any money, minimum childcare, petrol for 2 cars, £70 a month between us which covers kids clubs, council tax and buildings insurance and they said we can't afford it! We pay double a month now what the new payments will be and can easily afford it. I now have to send evidence of child benefit and DLA (which they never asked for initially).

These new rules seem ridiculous. Our MIP was agreed and on the phone when they worked out how much we could borrow, they said 105k! We aren't asking for anywhere near that much.

I would be concerned OP, sorry.

crapbag are you using a broker? It sounds as though they're getting their calcs wrong there. I recommend London & Country.

We're using Santander and have been approved, subject to valuation. They don't get the valuation until they have approved the borrower but I'm not sure if that's the same for all lenders.

No, no broker. This was direct with the lender as we want to stay with the same one.

We are using Nationwide and our valuation/survey is today. They turned us down before it was even done so I guess they don't work in the same way.

Our broker told us that Nationwide have the strictest affordability criteria. Halifax and Santander are better, especially with childcare vouchers if you use them. Nationwide basically double count the childcare.

Sadly, I think the new rules are going to cause serious problems within the market place until things settle down - this is the reason why we have decided not to move until next Summer.

OP - if your lender is sending out someone to survey I'd say they've got a yes in principle. Nothing definite until the papers are released but fingers crossed.

I don't even NEED childcare. I put £26 a month down because I put 2 sessions together for a full day and I have to pay for the lunch hour. I am a SAHM. I even had to put why the cost was so low when I made the application. It annoys me that they are really taking that into account when it shouldn't be.

They also told me before that they take ESA into account but now apparently they don't. It didn't worry me though as I assumed DH's wage would be more than enough, that and the 52k deposit we have, but no, it seems not. I am getting very fed up with Nationwide as I have had nothing but problems through this whole application. Every single person I speak to tells me something different to the last. 2 lots of letters have not been received. I had never had a problem with them previously and they do have one of the best mortgage rates for what we want which is why we want to stay with them.

I am just hoping that the DLA and child benefit will push us into affordability. Pisses me off that our mortgage payments will be £218 per month! Previously we have been paying £420 with no problems and they say we can't afford half of that.

A yes in principle may not mean that much now, after our problems. We had that and we have passed the credit checks and they are saying no.

Thanks for your replies.

We were ready to exchange a couple of weeks ago with signed contracts & transfers, cleared deposit, as where those either side. Then we found out there was an extra person in the chain who'd just been turned down under the new regulations. We know he's approached a lender who is more flexible, that's why I'm on tenderhooks as to wehther they're willing to give him a mortgage (subject to house being suitable).

Crapbag - sorry you've been turned down, fingers crossed you can sort something out with another lender. Go through your finances, cut back what figures you can and go along with a list.

I agree Nationwide are notoriously fussy about who they lend too. Try a broker, they will know who is the best for your circumstances which save a lot of time and heart ache.

I don't know how agents can say that yet about mortgages and any effect they will have. The new regulations are just new so it will take 5/6 months before a proper pattern is established.

We have had a purchase fall to bits today because the buyer who had an offer in principle agreed before the changes had her loan declined this morning.

Offer in principle is when the bank says yes to credit check but the underwriter still needs to go through everything with a fine tooth comb.

Pretty much and basic affordability.

I think it is too early to tell. Also brokers will start to understand who the tough lenders are. As an exercise I ran my details through Nationwide's, " find out how you could borrow" calculator a couple of weeks ago. Gave exactly the same income/expenditure figures as when we applied for our mortgage with them last year, the amount they proposed to lend was reduced by over 50% and I wouldn't have got the mortgage now, despite the fact that I overpay substantially each month and the LTV was about 40%. Did the same thing with the Halifax, much more generous.
I do wonder though whether declined applications will have an impact on subsequent applications, I think I had to state whether I had any declined mortgage applications previously, I suspect this counts against an applicant during the underwriting process.

I think we'll just have to sit tight and hope he gets a mortgage.

Iseenyou, yes the person at the bottom of the chain was going to keep his property and cash in stocks, share and ISAs. He then found out they weren't worth what he thought and no one told us he was having to sell his property. Really annoying, especially as I thought us and the ones either side were ready, and it was only when I asked agent to check if we'd be exchanging soon that this came out. The agent knew we'd all been working towards a certain date for at least a month.