Can the Bank rescind the Loan Offer??

P

pumpkin

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Hi All,

I wonder if anyone has faced a similar predicament and can advise.

We are FTB's in receipt of a Loan Offer of 285k on a 100% Mortgage basis from PTSB through a Broker.

We bought off plans in Feb'06 and received a Loan Offer based on this. Our most recent completion date from the Builders is May'07. I contacted our Broker recently to query when we should renew our Loan Offer since it will clearly lapse in the time between Offer and Completion. The Broker advised that it was valid for one year until 07/04/07 and "we will then see where things are at".

My concern is that given all the hikes in interest rates recently and going forward is it likely that the Bank can review and decrease the agreed Loan Offer thereby meaning that we can't afford to buy the property?

I've been in touch with the Broker about this but have yet to receive an answer.

If so is there any way around this so that we can ensure we don't lose our property before we even move in??

Any help or advice would be much appreciated.
 
Hi,

There is no legal obligation on yourself or the bank to take up the loan offer until your sign same (it is only an offer at this point).

If the bank did recieve information regarding the application that contraveend the origional loan offer or if interest rates changed so dramatically that you now would not qualify for the origional loan that was offered then I imagine the bank would be within their rights to recind the loan offer.

I would however suggest that you contact your Solicitor regarding this matter as a copy of the loan offer will have been sent to them and they would be in a better position to advise you on what legal rights the instiution have in this regard.

Hope this helps.
 
Loans offers on new builds are usually valid for 1 year.

Once you have a formal loan offer, to get it renewed\reissued if it's going out of date most Lenders just require confirmation you are still in the same job and on the same salary.

They will look for an up to date payslip and possible salary cert.

They may or may not run another credit check on you to confirm you haven’t got any loans in the meantime.

When Interest rates go up it does affect lending criteria and reduces down your borrowing potential.

If you have an existing loan offer, Lenders will honour it though.

The likelihood is your salary will increase by May of next year also, so I wouldn't worry.


The Brokers kinda right. Its hard to give you an definite answer, technically you are at risk if you loan offer goes out of date, but Lenders aren't cruel , there in the business of lending money so if you've been approved with a formal loan offer , they should honour it with another one assuming you haven’t changed jobs.

They'll also take into account the possible capital appreciation on the property in the meantime which will stand to you.
 
If you have an existing loan offer, Lenders will honour it though.
Click to expand...

In the event of a rate increase, which effectviely means a lower borrowing capacity, the lenders will honour the amount approved based on rates at the time of approval.
 
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