Mortgage company changed how much they are willing to lend

[Jessica12345625]

When the stamp duty holiday was announced my husband I decided to look for a bigger house.
We are one year into a two year fixed mortgage so have decided to port our mortgage over to avoid paying an exit fee.
Originally they said they can lend us 320,000. We found a house about 2 months ago which meant we would need to borrow the maximum amount. We have started the paperwork, and have paid the mortgage company a fee of 400 for a survey.
However, today we got a call from my mortgage advisor saying that they are reducing the amount they are lending to 260,000.
Obviously this means we can't afford the house we wanted. How common is this? Is there anything we can do? Has this happened to anyone else?

Is that because they've withdrawn the LTV you need with your deposit?

Or maybe because they've valued the house at 60k less than you have offered?

I am not very good with technical terms... but I have just worked out that my ltv is 81% which is higher than average right? Maybe that could be the reason?
Our mortgage advisor said that they have just changed their mind about how much they are willing to lend us, but didn't give a reason. I am just confused as to how it can change SO much.

Ex mortgage advisor. The amount they will lend would only usually change drastically if something wasn’t input correctly in the AIP. Ie missing off an outgoing or including overtime that the lender can’t use or perhaps not putting in a HP or loan payment

@Junglerum thank you for your reply.
We don't ever get overtime pay and don't have any credit cards/loans etc, just our mortgage.
I am guessing either the salaries were input incorrectly or they have suddenly decided to drastically change the amount they are willing to let us borrow due to covid :(

Isn’t th 81% LTV the issue? Maybe it needs to be 80% so that your deposit is 20%. Can you go over the forms to check they were all correctly filled out? Was the valuation the same as the agreed price?

Could you end the mortgage term early and pay the fee (obviously depending on how much it is) if another mortgage provider is willing to lend the amount needed?

Also you’re not pregnant or expecting another ‘change in circumstances’, are you?

@JoJoSM2 maybe, if we needed to we could put some extra money to make it 80% but when I spoke to my mortgage advisor she didn't say anything about that, she just said that they have changed their mind, but didn't say why.
Maybe I should ask to double check all the forms.
We didn't get a copy of the valuation that was completed, as apparently it was just for the mortgage company and we wouldn't get a copy. Saying that, we paid the money for the survey on the Tuesday, and they told my mortgage advisor on the Wednesday that we cannot borrow that much... so not sure if they would have even done the survey at this point as it was only 24 hours.

not a conventional mortgage but our company would do that only if the survey showed a reduced value or as people have said something was input incorrectly. Did they give you a copy quote,or agreement?

@Bananaman123 we haven't received any documents from any surveys that were carried out.

We had a similar thing happen last week. We had an AIP, found a house, sent off the mortgage application, they valued the house - all was fine. Then they called us to say they were reducing the amount they would lend us.
Originally they were willing to lend up to 5.5x our income but reduced it to 4.5x. It was nothing to do with our application or the house but they were reducing the income multiple for everyone. It was something to do with the bank nearing the max amount of mortgages they could lend at more than 4.5x income.
Not sure if your situation is similar

I’d just ask the mortgage adviser to run the numbers again with a 20% deposit. Are they independent and can they look at other lenders? And do they come across switched on?

@wedding2020 I am sorry that happened to you. It's so sad when you find a house you fall in love with, and then it's just taken away from you. Maybe you are right and they have just changed their calculations. It's so sad as we might not be able to move now.
@jojosm2 thank you for your help. I will ask her if she can do the calculations again with a slightly bigger deposit. Fingers crossed that is the reason. I will also ask about other mortgage companies, just not ideal paying the leaving fee

Why are you going through a mortgage advisor when you intended to stay with your current lender?

Surely it's the mortgage advisors job to ask why when they receive such news? Call the lender directly and ask. There is a reason and only they will know it.