HELP mortgage nightmare...any advice please lovely Mumsnetters

[Jayfee]

First time buyer son and dp had a free valuation survey from the building society who had agreed their mortgage in principle.
First question:
Why won't the building society let them see the valuation?
The bank then made them get a structural survey done as a result of the valuation survey they had not seen. This came back clear apart from a small amount of optional cosmetic work.
Now the bank want a £2000 retention and have down valued the property by £10,000.

Son and dp are distraught. They are waiting for written confirmation from the bank. They have been using an independent mortgage advisor who has gone on holiday and told them to deal with it directly with the building society. No idea what to do.

Any advice most gratefully received lovely Mumsnetters

Not sure on your figures.

Mortgage offer = £360K
Agreed price = £372K

Difference = £12K (£10K under & £2K retained as advised by broker)

Where did you get £14K from?

With the lease extension, they cannot afford this house. They need to renegotiate. House prices are beginning to stagnate on some places - it would be hellish for them to be stuck in negative equity. If they have fixed term mortgage they'll need to remortgage at the end of that term, they should not buy at the price previously agreed.

Back to vendor and ask for a reduction. Accept nothing less than 50% meeting in the middle I.e. £6K off (making purchase price £368K) or walk. Push for full reduction unless it is somehow very special indeed.

90% of 360000 is 324000 but bs have offered 322000... presumably this is the 2000 retention plus 120000 difference between 372 and 360 equals14000. Thanks for your advice.

So they emailed the agent who emailed back in quite an unpleasant tone. now wish they had gone through the solicitor to try and renegotiate. let' s hope the vendors don't listen to the estate agent. he has made several mistakes and is quite aggressive in how he talks to my son's dp. still hoping it works out ok. it has been nearly three months since they had their initial offer accepted.

The agent hasnt asked the vendors to reduce the price but are telling them to go to a different mortgage broker that he will recommend. I think his agency is a franchise so he is self governing so to speak. I just don't like the sound of it tbh. not sure whether to advise them to ask the solicitor to make a lower offer. i think lndon prices are dipping lookng at the internet

That agent sounds absolutely awful and just out for as much commission as possible.

No. They should tell the estate agent thanks but no thanks. The valuation from a reputable mortgage company has come back low - they do not wish to wreck their credit file with multiple searches.

Then they should ask their solicitor to write to their vendor's solicitor (with a copy to the estate agent) to inform them of the need to renegotiate as the mortgage valuation plus unexpected extension of lease fee means that the previous offer is now off the table.

They should be prepared to walk away.

A cautionary tale. Friends of ours in London offered over the mortgage valuation on a flat they liked some years back. Property market red-hot, bidding wars etc. Mortgage company down valued it significantly and they had to walk away. Subsequently bought another (very nice) place (at a very hefty purchase price), motivated by completing quickly as they were so disappointed to lose the previous property. Many years later, this property has not increased in value enough to make the difference up to allow the next step on the ladder, and other new-build apartments have colonised the space that once made it very desirable. Buy in haste...

London is a very big place. There will be other "perfect" properties. Your DS and his DP should be prepared to walk away and look for another place.

I would think the issue is the lease if the structural survey has come back ok.

I hate to say this but we had the same thing with a property in London. We offered on the condition the vendor extended the lease prior to completion. The estate agent lied to us (and possibly the vendor too) and said all in hand. We paid for survey, searches etc before our solicitor discovered the vendor had no intention of extending the lease. We walked away because it just wasn't worth the money without the lease extension and we couldn't get the lease extended straight away for some reason I forget.

There are literally hundreds of thousands of properties for sale in London. Everything about this sale is saying walk away or pay less for the property. Just think logically about it. Who do you trust? The lender who has a finanacial stake in making sure your ds and his dp pay no more than market value; the solicitor whose job and profession is to ensure your ds and his dp are protected from a legal perspective... or the vendor/estate agent whose sole objective is to flog the property for as much cash as they can get for it?

Keep looking. This is not the right property. There will be others.

Ah, good point Moving.

OP, most leasehold properties have a clause in the contract that states that you need to own the property for a period of time (often 2 years is standard) before you can apply to extend the lease - and a long enough lease is usually a condition of the mortgage company before they will lend.

So the purchasers legally cannot apply themselves to extend the lease - the vendor has to do that. It may be costing them £3K, but that doesn't mean your DS has to pay an "extra" £3K - it means if the vendor wants to sell to your DS (or anyone who needs a mortgage to purchase) that THEY have to suck up the cost.

Everything about this screams bad purchase for a first time buy, tbh.

oh i so agree with the comments above. they are moving in here sunday as they gave up their rdnted flat expecting tobebuying the flat. i dont think they will have time to do much before then. they both work full time and son is very busy so i am trying not to interfere..just want to protect them

I think the very best thing you can do is to give them options. They're going to be staying with you which is incredibly generous. Make it clear how long they can stay so they know how pressured things actually need to be. Time to think and make decisions is important. They don't need to do anything before Sunday.

It also doesn't cost anything to go and look at other properties so you can reassure them they have choices.

I have been a ftb in London. I have also run a successful mortgage brokerage in London so I used to know a thing or two about the business of buying and selling London properties. I still had more than five offers accepted before we actually completed! It was pre-2007 though.

For me it was particularly stressful because there was a strong possibility of ending up homeless or priced out of the market. A bit of space and some expertise helped massively so if you can offer that and a listening ear that can help a lot.

Well I suppose the young have to make their own cockups. They are paying for a second valuation hoping it will be higher....mortgage broker arranging that apparently...and he will get commission if they take out a mortgage. The agent won't try to get the vendors to reduce the price (don't even know if he has asked them) because he has made so many mistakes that they will (he thinks) take the sale away from him. Just hope they don't make a bad mistake. They have only ever seen the area and flat twice. I saw it the second time. Needs a lot of work as very tatty and has been rented.I am going to try very hard not to say too much when then move in here Saturday.

Oh gawd. Sounding worse!

Remind your DS and his DP that he owes the EA nothing. Sounds like emotional blackmail and scaremongering.

The EA works for the vendor, not your DS. They should remember that.
Go through their solicitor to the vendor's solicitor.

Hope they don't make a huge mistake, OP.

Any update, op?

Your son and his dp does not need to go to his solicitor to renegotiate price. His mortgage broker does. I have a strong sense that the last person who pulled out did so because of the lease term. These are things that the estate agents should find out from the off.

Your son needs to go batshit at the mortgage broker and get them to pull their finger out, grow some balls and renegotiate hard.