HELP NEEDED: Sale agreed but bank refuses to give us the mortgage

amyed198

Hey there,

Looking for advice here on our current situation. After being on the property hunt for over 14 months myself and my OH finally found our forever home 4 weeks ago. The house was 400k and we managed to go sale agreed at 372,500. There was no bidding war at all and everything seemed too good to be true.

The bank just informed us today that they are removing our exemption even though both of our incomes have not been impacted by Covid. We are absolutely distraught and sick to our stomachs, this was our forever home and without the exemption we are roughly 35k short, this is scraping everything we have together. Unfortuantley we have no family members that could put up the cash, as they already contributed 28k gift towards our deposit.

We are in urgent need of advice as my OH has even considered loan sharks at this stage.

guyfawkes5

amyed198 wrote: »

Hey there,

Looking for advice here on our current situation. After being on the property hunt for over 14 months myself and my OH finally found our forever home 4 weeks ago. The house was 400k and we managed to go sale agreed at 372,500. There was no bidding war at all and everything seemed too good to be true.

The bank just informed us today that they are removing our exemption even though both of our incomes have not been impacted by Covid. We are absolutely distraught and sick to our stomachs, this was our forever home and without the exemption we are roughly 35k short, this is scraping everything we have together. Unfortuantley we have no family members that could put up the cash, as they already contributed 28k gift towards our deposit.

We are in urgent need of advice as my OH has even considered loan sharks at this stage.

Unfortunately the banks are not obliged to provide you an LTI/deposit exemption, so you could ask their rationale here and if it could be addressed, but I don't know if there's some complaint procedure you could follow.

I would think your best course of action is to research into which banks are still providing exemptions and then contact them. They should let you know the chances very early in the process. You may also want to let the sellers know they may be delays while you're doing this.

Getting money from loan sharks is a beyond terrible idea. Even beyond the obvious implications in terms of interest and potential consequences from dealing with characters like that, if the bank were to find out you had extra loans against your name then they would almost certainly pull the deal. They would also surely find out from seeing the closing price on the house and ask where the extra deposit came from. Just don't do this.

lawred2

There will be many more to follow you.. the valuations underpinning mortgage approvals aren't worth the paper they are written on..

PhilipJ

Dont go near loan sharks. at this stage maybe just be upfront with vendors. will they take a less amount? are they desperate to sell? It may be a case of taking it on the chin and prepare to move on. Its a tough predicament for the two of you....but best of luck and I hope it works out well for you.

Mr. Incognito

Could you use deposit to apply for credit union loan for the shortfall.

Try not to get emotional about property and use words like forever home. Its just an address and some bricks.

The bank could be doing you a favour here as prices are going to freefall and if you keep saving you get get something nicer in a year

Dav010

I’d suggest you discuss this with the seller, they must realise that if you pull out, finding a new buyer at the same price might be very difficult. Let them know the deal cannot go ahead at the current price and that you need a reduction in price. The interest rate charged by short term lenders is extremely high, don’t go there.

guyfawkes5

Mr. Incognito wrote: »

Could you use deposit to apply for credit union loan for the shortfall.

This is not a good idea as banks will usually ask and proceed on the assumption that you have declared all your loans to them. At the very least you should run this approach by the bank.

Bigmac1euro

Can I ask what bank this is with?
I currently have an exemption offered to me by Ulster Bank.

awec

In all likelihood, either the seller agrees to knock another 35k off the price or you're back to square one unfortunately.

fliball123

amyed198 wrote: »

Hey there,

Looking for advice here on our current situation. After being on the property hunt for over 14 months myself and my OH finally found our forever home 4 weeks ago. The house was 400k and we managed to go sale agreed at 372,500. There was no bidding war at all and everything seemed too good to be true.

The bank just informed us today that they are removing our exemption even though both of our incomes have not been impacted by Covid. We are absolutely distraught and sick to our stomachs, this was our forever home and without the exemption we are roughly 35k short, this is scraping everything we have together. Unfortuantley we have no family members that could put up the cash, as they already contributed 28k gift towards our deposit.

We are in urgent need of advice as my OH has even considered loan sharks at this stage.

try and get a hold of a mortgage broker he/she will go to every option for you and see what he/she can get it may be a little more expensive. I would also try and beg, borrow or steal as much up front deposit as I could off friends family members

lomb

Ask your folks if they could borrow the cash for a 'car loan' and then you will pay it off
Truthfully I've been told many deposits are funded this way. The money is 'gifted' but in reality it never is. All good property deals go down to the wire and always have a story ,it wouldn't be any fun any other way, good luck:)

ted1

lomb wrote: »

Ask your folks if they could borrow the cash for a 'car loan' and then you will pay it off
Truthfully I've been told many deposits are funded this way. The money is 'gifted' but in reality it never is. All good property deals go down to the wire and always have a story ,it wouldn't be any fun any other way, good luck:)

A 35k car loan will be over a short term at a high rate. If the op is looking for an exemption his mortgage will be already a significant portion of his income. Lumping in a high cost short term loan isn’t advisable

fliball123

ted1 wrote: »

A 35k car loan will be over a short term at a high rate. If the op is looking for an exemption his mortgage will be already a significant portion of his income. Lumping in a high cost short term loan isn’t advisable

Well we dont know yet if he/she will lose their deposit so thats what he/she has to weigh up

Eric Cartman

20k at 5 years in a credit union is about 400 a month, ask the seller to come down 15 and try do this is the most I could possibly advise, the 35 as a 5 year loan would be too much, but theres no way you'd be given a mortgage is 200 quid a month extra each was going to put you on the breadline.

second suggestion, do you two own your cars , are they worth much, could get a few quid that way and buy a 2 grand runaround to get you through

DelBoy Trotter

fliball123 wrote: »

Well we dont know yet if he/she will lose their deposit so thats what he/she has to weigh up

They won't lose their deposit as long as they haven't signed contracts

ED E

Your income hasn't been impacted, yet. Lots of companies could be squeezed by their own customers going under. Bank is probably being prudent.

Eric Cartman

ED E wrote: »

Your income hasn't been impacted, yet. Lots of companies could be squeezed by their own customers going under. Bank is probably being prudent.

Everyone forgets the entire loan book and the banks credit rating. You can be the best customer in the world, even 50-100 people stop paying / default on a mortgage and if you're in that loan bundle then you suffer too.

random_banter

Lots of people saying that exemptions have gone in most banks now. However there has been mention that AIB are still giving them. Perhaps you could try there?

dkd21

If the retraction of the exemption is directly influenced by your job/income futures it may be all for the best . It may seem unfortunate or unfair at this stage especially as close to a deal as you are but as said earlier try to distance yourself emotionally , take a day or two and re-evaluate your situation .

EmptyTree

dkd21 wrote: »

If the retraction of the exemption is directly influenced by your job/income futures it may be all for the best . It may seem unfortunate or unfair at this stage especially as close to a deal as you are but as said earlier try to distance yourself emotionally , take a day or two and re-evaluate your situation .

This times a million. OP I know this is tough now, but your better to be sick to your stomach over missing out on your dream house now than to be sick to your stomach for a loan you may not be able to afford in a few years time.

Your dream house is a transient thing for this moment in time, there will always be other dream houses.

ted1

fliball123 wrote: »

Well we dont know yet if he/she will lose their deposit so thats what he/she has to weigh up

Aren’t deposits refundable

893bet

The price of that house is likely to fall. Not a good time to buy.

amyed198

It was already a tough time getting them down to 372 from 400. They wouldn't budge on 375k but eventually settle at 372.

Everyone who knew we were sale agreed we congratulating us and saying we did the right thing buying now as prices will likely rise due to lack of supply etc. Very frustrated as it looks like we have to go back to the drawing board on a reduced budget, not a lot of good stock out right for less than 350.

JDD

Did you not get a loan offer letter? I don't mean the Approval in Principle letter, I mean the loan offer letter that confirms how much the bank is allowing you to borrow? The one you have to sign and return.

I presume you are at sale agreed stage but have not yet signed contracts, in which case perhaps you haven't got the loan offer letter yet?

Mrs OBumble

amyed198 wrote: »

.... my OH has even considered loan sharks at this stage.

The bank made the right call: anyone who would even entertain this thought is not of sound mind, so should not be able to get a loan.

Ditto anyone who believes prices are going to rise any time soon.

thunderdog

BOI, Ulster Bank, KBC and Dilosk/ICS have all suspended allowing exemptions

REBELSAFC

amyed198 wrote: »

It was already a tough time getting them down to 372 from 400. They wouldn't budge on 375k but eventually settle at 372.

Everyone who knew we were sale agreed we congratulating us and saying we did the right thing buying now as prices will likely rise due to lack of supply etc. Very frustrated as it looks like we have to go back to the drawing board on a reduced budget, not a lot of good stock out right for less than 350.

I'd reassess where you are getting your advice from! My advice FWIW would be to hold tough. Explain your predicament to the estate agent and hold tough for a few weeks. Don't do anything rash. The situation might fall in your favour in the long term

JeffKenna

Have a serious think if you really want this house and at the current price. If so, I'd try and approach the buyer and explain the situation. See if they will reduce the price by €15k and head to the credit union for the remaining €20k.

Black_Knight

You may have agreed 372k with the seller before a recession was impending, but consider this:
- You had no other bidders on the property, so no one else thought it was worth the money
- Futures are uncertain now, and most likely they'll be less buyers out there for the next several months/years.
- Any future buyers would be more cautious with their money given the uncertainly of the economy
- the house is likely to go down in value, so if you bail now, the agent won't be viewing the place for months, and prices will be falling.

It's a big drop for the seller to meet you, so likely he could put it back up for sale and get a better offer than the bank can loan you, but if you can negotiate more towards your budget you might get lucky.

If you can't, it wasn't meant to be. It sounds like ye will have zero (or less) in the bank of ye were to buy this house, and buying the house is only the first bill. Furniture, appliances, solicitors fees. You'll need a few thousand at least after everyone is paid.

ladystardust

We lost our house at 375 a few weeks ago. No new houses being put on market really. Only 375+ and <300. All those in between, major bidding wars where we are. It was so very upsetting and one of the worst weeks. We had emotionally invested in this property as the forever home. But learned not to do that in future. We were able to let it go, and Steele ourselves against disappointment if we lose out on other properties. I'm hoping it turns out the best long term for the likes of us. Good luck.

lawred2

amyed198 wrote: »

It was already a tough time getting them down to 372 from 400. They wouldn't budge on 375k but eventually settle at 372.

Everyone who knew we were sale agreed we congratulating us and saying we did the right thing buying now as prices will likely rise due to lack of supply etc. Very frustrated as it looks like we have to go back to the drawing board on a reduced budget, not a lot of good stock out right for less than 350.

Presume they said this before March right?