Negotiated £10k off the price a week before completing - DH says we'll just be lent £10k less. Is ge right?

[Movingmovingwoohoo]

We're a week off completion for a place we're buying. The survey has brought up an issue (the building next door is going to change its use from corner shop to a block of flats - our windows look directly onto it and it'll be really noisy and disruptive etc etc).

Anyway the seller has agreed to sell it for £10k less. I still want it and can live with the disruption for that. And the extra savings I'd spend on changing the kitchen a little.

But DH says the £10k won't be "ours" - the bank will just lend us £10k less. I thought we'd just borrow the same, keep the £10k out of our deposit.

Is he right?

Depends what you agree with your lender. You'll need to tell them about the price cut and see what they say re revised loan to value etc.

No, he's not. Unless you want to have a smaller mortgage, you can take the 10k off your deposit and simply borrow the same amount you were planning to. But be warned you'll still have to get a new mortgage offer drawn up to reflect the change in purchase price and that could take a few days for your provider to sort out.

Best thing is your solicitor and their solicitor agreeing that your solucitor will send 10k less across, we did this when we bought ourhouse, it was the solicitors idea as he explained otherwise by advisong lender tbe whole money side would have to start from scratch.

Ask your solicitor, they'll deal with this often.

Oh that's really interesting, joyce! Otherwise - arg - I don't think I could stand to delay it with a new mortgage offer etc. Am also scared that the mortgage company could bolt! (I always worry about losing properties at the last second.)

Is it a common thing? Would either solicitor think it cheeky?

It wouldn't be a new mortgage offer and the whole affordability palaver - it would simply be changing the amount of the purchase on the docs. We've just had to do it and it took two weeks because some numpty at the lender re-sent the old docs again. If you can do it Joyce's way I definitely would!

I presume you mean a week from exchange? Important difference.

It's called an allowance and won't make the offer change, therefore no re-application.

Sorry yes - a week from exchange! Was typing quickly while feeding the baby!

Ooh this allowance info is so good to hear...

What is your loan to value?
That could depend on whether they will lower the amount they will lend against the purchase

Agree with sparechange. The change of use may affect your lender's mortgage valuation and how much it is prepared to lend on your purchase. You should inform them of the change otherwise you could run into issues - they could call in your mortgage if they find you withheld material information prior to drawdown which affected their security.

How much are you borrowing & how much is the house worth? You can have an allowance but I think that there are limits on how much it can be and I think it is supposed to be used for remedying work, e.g. When I sold my first place, the survey showed there was damp & an allowance of £2k was agreed as they needed to remedy the damp. With yours, the £10k won't remedy the change of use.
Value is relevant too. If you're buying a house worth £150k and have a 10% deposit, the bank will be concerned if it is lending £135 and you are effectively only paying £5k. If the house is worth £800k and you have a 50% deposit, the bank are going to be much less concerned that you are now paying £390k rather than £400k as there is still a lot of equity in the property.

Crikey! Okay we are borrowing £360,000 and the place (now) costs £700,000. (So our loan to value is pretty good. - London and prices rose on our current place leaving us with a large deposit.)

I hadn't even thought about having to tell the lenders that additional info. Oh it gets so complicated! So nervous we may still lose it... the whole thing is so stressful!

If anything, the change to residential next door is good LONG term, as then the risk of it becoming a restaurant or something is nill. It's just short-term that it'll be really tricky to live with. And there's always the risk that they could mess it up and damage ours in some way (even though we're not connected). Small chance of that happening, but it isn't unheard of...

You need to tell the lender. You're unlikely to lose the rate you're on as your current LTV is only 51%. If you went through a mortgage broker, tell them and then let them chase the offer up. You can let your solicitor know as well so they can prepare for a change. Your lender should then reissue a new offer relatively quickly - depending on who they are - and you shouldn't get much, if any, delay.

Solicitors will see this loads and it's not cheeky, just notstalling the process! Good luck!

OP are you aware that £10k is less than half a percent of what you are buying. Really not worth stressing about and it's not compensation for any stress re building works next door.

OP are you aware that £10k is less than half a percent of what you are buying. Really not worth stressing about and it's not compensation for any stress re building works next door.

Yeah I don't think that 10k is that good a deal!

Oh crikey! Okay, I think i was happy to take that because I want the place still and it'd be enough to change the kitchen. Maybe I should have gone for more? He was pretty quick to just take that off.

What do you reckon would be reasonable? Given it'll probably be about a year building next door!

I think you need to think about the long term impact of flats, particularly on parking. How many flats are being built & how many parking spaces are being built? How many cars might those flats have? Do you have a designated parking space at the moment?
Take a look at the local council's planning pages as that will answer the above and you can take a look at the drawings and see if any windows will overlook you etc.