Buying a house without mortgage approval

W

wrappo

Registered User
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Hi there
Wondering if anyone can advise me? have put the cart before the horse somewhat...
I have just paid a booking deposit on a house so it's sale agreed status. Haven't got formal approval yet as collecting all documentation etc (although it is a formality as buying below amount I would qualify for). Think the next step is initial contracts and I believe I have to pay a further deposit at this stage? Not sure how long it takes to draw up initial contract but do I need something from the bank at contract stage to show I have approval?

Many thanks
 
Hello,

It normally takes about a week or two for the contracts to get to you solicitors and from there you have 21 days to sign same, your solicitors will not allow you to sign the contracts until you have official loan offer in hand, if you are collecting your paperwork at the moment in reality it may take about 3/4 weeks to have official loan approval.
 
I have just paid a booking deposit on a house so it's sale agreed status. Haven't got formal approval yet as collecting all documentation etc (although it is a formality as buying below amount I would qualify for).
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Not trying to rain on your parade......but have you thought about what if you dont get approval and the effect this can have on the vendor??? I am selling my house and TWICE gone sale agreed rec'd booking deposit but transpires that the buyer isnt in a position to go any further!!!

This has been frustrating and costly (both time and financially) for us as our house is now on the market for 25k less than our first sale agreed offer and in order to secure the house we wish to buy had to get an expensive bridging loan or risk losing it!

Personally I wish you luck and hope all works out for you but sometimes things get dragged out and if you are not prepared you shouldnt really expose the vendor to your risk.
 
CathyK said:
your solicitors will not allow you to sign the contracts until you have official loan offer in hand
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Will they not allow you at all or just very strongly advise that you should not sign, surely at the end of the day if the purchaser wants to take the very huge risks associated with signing with no loan approval then that is their choice to make (not one I'd recommend they make though).
 
most likely the solicitor won't allow you to sign, and they'd be right. if, for any reason you don't get approval you won't get any of your deposit back and the solicitor won't leave themselves open to any liability there. also financially you may be fine but if there's any problem with life assurance etc you won't get mortgage approval. the solicitor is really acting in your best interests
 
You could sign, and make the contract subect to loan approval, but this might not be acceptable to Vendor. If you signed an unconditional contract (with no loan approval conditionality) and did not get loan approval the Vendor could, in theory, hold you accountable for full purchase price, but would likely look to pocket the deposit. However, if, as you say, loan approval is a formality and you make the application without delay, you should have it by the time your Solicitor gets contracts and title, as it can take time for the Vendors Solicitor to get title deeds.
 
i would advise strongly against regarding loan approval as a 'formality'. all kinds of things, apart from not meeting income requirements, can stop you from getting approval. something as simple as missing one piece of documentation can cause a delay, which might result in the vendor pulling out. also you could be refused life assurance without being offered an explanation. we were refused life assurance for no apparent reason, despite both of us being in full health with no medical history and just managed to get another company to insure us before the bank were notified by the broker.
 
Snork Maiden
I appreciate what you are saying . In this case, however, approval is in the bag and there is no vendor risk. My concern was around timings which has kindly been addressed here.
 
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