Last minute mortgage issues

[Ghostella]

We’re about the exchange on our house sale and onward purchase. We’re in the middle of a big chain and the whole thing keeps being pushed back by a week due to some form or other needing chasing somewhere on the chain - it’s very frustrating to say the least. We are buying a house for 505k. It was on the market for 500k originally and we offered 515k which was accepted and we had a mortgage accepted to buy it at that amount. However, after the survey we renegotiated and all agreed a price of 505k instead (this was last November, all solicitors informed). Exchange has now been agreed for this Thursday and completion this Friday. Our solicitor called this morning to say we have to buy the house at 515k or pull out?!! Apparently the original mortgage offer was for buying the house at that amount and can’t be changed. He says we can ask the vendor to agree to send us 10k back upon the sale but we can’t legally link it to the sale - I don’t understand how that would work and if I was the vendor I’d say no!!! So totally don’t want to put them in that position. The only other option is to reapply for a new mortgage again but that will take 4-6 weeks according to him. We are so upset, how has this happened?! Had anyone been in this position and sorted anything by out?

Speak to your broker or lender immediately and see if the mortgage offer can be amended!

We have done, it can’t be!

Just asking at work (mortgage brokerage) and the consensus is unfortunately either paying the extra or delaying things until you can get amended offer out (which might be a week depending on the lender).

I'm sorry OP :(

Thank you @Outnumbered99 we’ve just had an email from our broker saying that we should expect an amended mortgage but may take a while. No idea what this will mean for the chain or of everything will still go ahead!! Rarrrrrrrr!!

I have everything crossed for you that it won't take long and cost you too much time. What a massive stress at this late point..

Was the reduction to get some specific work done on the house? Cant you make it a condition that the seller pays for this work instead of you? Eg £10k to fix the roof - seller to pay first £10k of roof works and you pay any excess over £10k?

@Outnumbered99 thank you!!

@FanSpamTastic apparently we can’t tie anything into the sale so we’d have to draw up separate contracts for 10k and I can’t see the vendor agreeing to that

Our mortgage offer took months to come through and reflected the original offer price not agreed reduction. Spoke directly to the lender and they faxed over an addendum to the original offer within the day.

@wineymummy that’s given me hope!!! Thank you for sharing! I’m going to be on the phone to everyone tomorrow and praying for the same thing!

I had to request an amended mortgage offer for a similar reason and it took 4 weeks (I’ve received it today). Explain the situation to the vendors, they will understand.

We had this last month. No one had bothered to tell us that we had to get the mortgage offer amended - it never occurred to me as it was less money.

Managed to get a cancellation phone appointment with Santander to for a new offer but this delayed us for a week and it was touch and go we would get the new date we had agreed for exchange and completion.

In the end though nothing had actually changed because we still borrowed the same amount as before and kept back some of the equity from the redemption figure and this covered the estate agent and solicitor fees.

If it’s urgent the lender can maybe do amended offer the same day... it’s a lower loan and ltv isn’t it ?so no more underwriting required? If it’s urgent I can’t see why it can’t be done same day? Really how can it take four weeks!!!

@TheBugHouse I agree!!! It’s unbelievable that it can take four weeks!! And yet it seems to in some cases!!!

Oh hang on, we were the same as ammary. Borrowed the same sum anyway just needed the purchase price updating on the offer letter. Also Santander. Sorry if I got false hopes up!

I’m not sure what we are going to do, we were just goi no to borrow less but if it is easier we can just borrow the same and take money out to put towards our renovation costs.

A lower sale price but same loan amount would increase the LTV so you could potentially end up on a higher interest rate surely?

Surely the £115k is paid to your solicitor to pay the seller. They pass on £105k leaving you £10k for home improvements or just to repay on your mortgage? (I live in Scotland so this might not apply)

Is the amount you are borrowing unchanged?

You have effectively changed the value of their security by £10k (value being arbitrarily what someone is willing to pay for it!)

This will push your LTV up which may impact the product and rate.

We actually want to borrow 10k less!

So what is the LTV % before and after?

We have roughly 200k equity. We wanted to borrow 315k to buy 515k house (so roughly 75%) .

Now we want to borrow 305k to buy 505k house (so roughly 76%).

Sorry percentages other way around - so we’d be borrowing 10k less and still be 1% less LTV right?

Does your solicitor mean an allowance of £10,000 from the purchase price?

@LetMeOut2021 what does that mean sorry?

Sorry just checked it and my percentages are all wrong!!! It’s actually 61% down to 60% LTV on the mortgage. It definitely goes down by 1%