Can this happen?

11 replies

clam · 11/04/2008 08:20

I heard yesterday that a local house chain fell through because the 1st time buyers at the bottom had had their mortgage offer withdrawn. Not sure of the details, but it appears that they were in possession of the offer, but because it was 100%, it was taken back in the light of the current economic situation. Surely that can't be right? We're supposed to be exchanging on Monday, and I'm frantic with worry in case the same happens in our chain.

OP posts:

SquonkTheBeerGuru · 11/04/2008 08:34

yeah, apparently a lot of lenders are stopping 100% mortgages.

So even though the offer was in place, because the money hasn't actually been handed over, they can rescind the offer.

It's a bugger, but I'm not sure there's much you can do.

nervousal · 11/04/2008 09:32

yup - if offer hasn't been accepted then they can still withdraw it.

zippitippitoes · 11/04/2008 09:33

yes really it an offer to treat

but until you have the specifics and sign on the dotted line for a morgage it isnt a guarantee..you could have a theoreticalk mortgagfe offer for twelve months so they cover their backs

Original poster

clam · 11/04/2008 10:39

Well, in our case, the offer was made a couple of months ago and everyone was ready to exchange a couple of weeks back, although it's now scheduled for Monday. Please tell me it's too late for them to pull it at this stage. Surely everything's been signed, ready for Monday.

OP posts:

ShinyPinkShoes · 11/04/2008 11:05

My understanding has always been that nothing was set in stone until exchange of contracts had taken place.

Will keep everythign crossed for you.

whoopsfallenoveragainandithurt · 11/04/2008 11:09

we had a mortgage offer and had to pull out on the day of completion as the lender would release funds as they had forgotten to ask for extra ID from me which I couldn't satisfy as they wouldn't accept the only ID I had left to show them (Passport in maiden name and marriage cert)
If special conditions on an offer aren't satisfied the offer can be withdrawn.

Youcannotbeserious · 11/04/2008 11:11

I don't think there are any 100% mortgages on the market now - they've all been withdrawn.

It's worth noting that, in the small print, a mortgage can still be withdrawn even after it's been accepted (signed for) and that still stands even after the house purchase has gone through....

A mortgage lender can demand repayment at any time. Sad, but true.

TillyScoutsmum · 11/04/2008 11:15

My brother has just had this happen to him - apparently there were 68 lenders offering 100% mortgages a couple of months ago and there are now 2 in the whole of the UK ...

Original poster

clam · 11/04/2008 11:15

Thanks, Shiny. I can't believe how pessimistic I'm being. DH is very chilled abou it it all.
Whoops, were you liable to pay a % of the total value if you pulled out after exchange?
And does anyone know what that % is? Or is it negotiable?

OP posts:

whoopsfallenoveragainandithurt · 11/04/2008 15:16

If you were to pull out after exchange you would pay whatever the agreed deposit was (would have been with the solicitor by the time you exchange)
Luckily my Solicitor was wary of the lender and decided to exchange and complete on the same day. this turned out to be a very good thing as all we lost financially was the search fee. (I work for the solcitors so didn't have any legal fees either)

sparkleymummy · 11/04/2008 15:39

You wouldn't necessarily lose the deposit if you pulled out after exchange because the seller would have a duty to mitigate their loss and try to find another buyer. But if they couldnt find another buyer at the same price (which is likely at the moment with prices dropping so quickly) you could lose it all.

Flip