pre-approval received now denied!

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classychick

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Last September we where approved for 365K credit on a new Mortgage - we received a loan offer letter to reflect this - unfortutely we where out bid - October another house came on market and again loan letter offer arrives for 375K (house pulled off market)...to cut along story short we viewd a house 2 weeks ago with the above price range - contacted bank and all was fine on giving asking price ect - we then put in offer - put down a booking deposit - happy as larry....you think!

Get a call from bank yesterday to say that the underwritters have come back to say we cant have it on the basis that there creteria has changed since October! Can they do this?? God I wouldnt have even looked at house never mind putting down offer if I thought this was going to happen!

Nothing has changed for us - salary/p60's/same employers/no debts ie. credit cards/car loans only the fact that we have about 10k more savings!

I really dont understand this - has anybody any experience of this happening to them.
 
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Maybe you could change the thread title to something like "Pre-approved for Investment Property Mortgage in Sept and Oct '09, but now denied" to make it a bit clearer what happened.
 
So i assume you will be renting out your present house and wish to buy another house??
I stand open to correction here but as far as i know some of the banks won't take rental income into account when calculating your repayment capacity so they will take it that you have two mortgages.
Edit to say.. i assume if you got pre -approval last october it was only valid for 6 months so when you reapplied again, they changed their criteria.
 
Its not an investment property we put deposit on but owner occupier
We were going to put our own house on the market and put the equity off new house. So nothing to do with rental........I cant understand how they could pull the plug!
 
classychick said:
Can they do this?? God I wouldnt have even looked at house never mind putting down offer if I thought this was going to happen!

Nothing has changed for us - salary/p60's/same employers/no debts ie. credit cards/car loans only the fact that we have about 10k more savings!

I really dont understand this - has anybody any experience of this happening to them.
Click to expand...

Yes they can, they can withdraw the mortgage right up until the day the mortgage cheque is cashed if they like. It may not seem like it at the moment but you can count yourself lucky that this happened early on in the purchase.

It is common at banks these days, though they should have made you well aware of the changing underwriting policy. Unfortunately there is nothing you can do about it save changing banks, withdrawing savings and vent your frustrations by bad mouthing that bank to all that will listen. Edit - you could make a complaint to the bank about their behaviour and if not satisfied with the response you could take it to the Ombudsman...

As one poster alluded to, pre Christmas some lenders took rental income on your current home into account, this is no longer the case so you have to prove you can aford both mortgages from your income plus be able to show you have enough disposable income to live on. This is a tough test to pass.

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The offer probably has "subject to contract contract denied" or some other such term that allows them to pull the offer up to the point of contracts being signed.
 
Onto bank today and they have revisted our file and are willing to offer us 280K without selling current property...no good to us unless we can raise another 80K in 6 weeks! So much for the BOI offering 100 Mortages a day!
 
classychick said:
Onto bank today and they have revisted our file and are willing to offer us 280K without selling current property...no good to us unless we can raise another 80K in 6 weeks! So much for the BOI offering 100 Mortages a day!
Click to expand...

But they did offer you a mortgage.
Anyway why don't you sell the current house like you intended to and then buy the new house once it is sold??
 
Yes similar has happened to me, I got pre-approval for a mortgage of 361k towards the end of last year. I checked back with them at the start of this year and even though my circumstances were the same (except that I had saved more) they reduced the maximum they would lend me to 330K.

When I checked again more recently the maximum has dropped to 310K. Since then we got a pay cut so I'm afraid to ask them now. Banks are obviously lending less across the board - when they are lending at all.
 
The banking situation is so volatile at the moment that situations are changing on a daily basis.

Last year we were under pressure to sell a house and were told by our solicitor that banks were pulling loan offers right up to the day of signing contracts. Needless to say we though the purchaser would never sign quick enough.
 
Thanks for all your replies - hoping to have hiouse up on market by end of next week. Only problem is when house is sold how much will the approval have dropped by then!
 
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