How to tell estate agents I can't get the mortgage

[Mortgagewoes1]

Accepted an offer from First Time Buyers a month ago.

Coincided with my end of year accounts so was advised by mortgage broker to run these accounts asap - doing so quickly has meant a bloody huge tax bill for me to pay in January I might add.

Mortgage broker now come back today and said we are highly unlikely to get through underwriting for the additional borrowing we need. DIP was given at £295k but it's looking like they will only loan us max of £210k. We need £260k minimum to make the purchase work.

I havne't instructed my solicitors yet, memorandums of sale have been drawn up though. And I did tell my estate agents to tell my buyers to hold their horses so to speak before sending in a surveyor or starting their searches.

BUT I need to tell both my estate agents and the estate agents of the house I want to buy that we have to pull out.

How the hell do I word this?

I feel so bad on the buyers.

Just tell them the truth, you are no longer in a position to move and will have to pull out of both sales. Tell them now

Hi, I'm really sorry but we're not able to borrow the amount we originally thought so will need to remove our property from the market and won't be able to proceed with our buyers.

Something like that, keep it simple. It's a business transaction so no need for any emotion.

Phone call or is email ok?

I need to ring them don't I.

Having a bloody nightmare this week - close friend died yesterday and my head is all over the place as it is.

I'm just hoping the buyers haven't spent any money - I did tell the EA to tell them not to, but who knows if they did?!

Email is fine. Something like ‘ordinarily I would call, but I had a sudden bereavement yesterday and am quite emotional.’

I am sorry for your loss and the horrid mortgage situation.

Thank you.

It's a bloody nightmare!

Now stuck in our house which tbh, I absolutely love but I do not love our neighbours (x2 crying babies) due to paper thin walls. It's also going to affect my child's school application in Sept as we are not in catchment (hence why we wanted to move mainly)

Going to take a few days to regroup.

The EA of the house you wanted to buy should have checked you had mortgage approval in place before submitting your offer to the vendor. They were at fault for not verifying this.

We had DIP which is what they wanted and proof of earnings.

Just send an email. Expect a phone call.

The economic situation is declining so rapidly that there is absolutely nothing anyone can provide that is set in stone and not liable to change

You will not be the only one..many people are going through this. Just do it ASAP.

How did you get DIP if earnings won't be enough?

DIP based on total year's income.

Apparently when they get to the nitty gritty it's basic wages marked as one income and overtime income marked as separate.

DH works different hours every single week - pay can vary depending on what week, where based, whether it's OT rate and there's also two different OT rates.

He's earned roughly the same yearly for the last 3 years but it's weekly pay they look at and that's it.

Oh, DS earns exactly the same every week so would have been different for him then.

How stressful- sorry to hear that.
An email will be fine, no need to phone if that makes it harder.

How many banks has your broker approached? They all treat self employed income differently and so may get a better result

A phone call is more polite but honestly, whatever works to convey the news is fine. And please don't stress about your FTB too much - they might not have got their mortgage as they hoped either, or the rates have gone up a lot for them and they were worried about repayments - or all sorts of things.

I completed as a FTB back in May and was fully prepared for things to collapse- 1 in 3 do so I never counted it as a done deal. I also took out buyers protection insurance in case the seller pulled out so I was covered. Your buyers may have done the same, or you can be assured they could have done so to mitigate any losses, the option was there.

I'm really sorry to hear things have not worked out as planned and you are dealing with a bereavement too. Don't stress about how to tell everyone - it'll be fine, just has to be done xx

I hate to add to your difficult week OP but it might be an idea to check your contract as you may be liable for estate agent fees. If they've fulfilled their part of the contract in providing you with a proceedable buyer, they may bill you. Harsh I know but happened to a friend of mine.

I was worried about that with the estate agent but I dug the paperwork out and it looks like i"m only liable once contracts have been exchanged.

My mortgage extra borrowing has to be with my existing mortgage lender as I have a 5 year fix (4 years left) at 1.29%! It would cost £10k alone just to get out of it, never mind the increase in mortgage payments of about £350 a month to go to a different lender.