mortgage declined

[kate2222]

just had a mortgage declined, surveyor requested Structural engineer report as to ascertain movement is non progressive. We had this done, report came back to test drain and gully repair/replace if necessary within next 12 months.
Surveyor told lender although he and the SE cannot catagorically confirm no further movement, further movement is highly unlikely. But the lender is refusing to offer. my broker is now complaining to the lender and threatening legal action, not sure if we have a leg to stand on but any advice/help would be much appreciated.

[Caspar]

Re: mortgage declined

It is very difficult when there is any form of subsidence. I had to pull out from a house purchase 6 years ago for this exact reason. The mortgage company has to protect its own interests in lending you money, and obviously if there is a risk that there may be further movement on the property, then they are going to be exceedingly cautious.

I honestly doubt legally you will get anywhere with them, so beware of wasting your money. Mine eventually compromised and said they'd give the mortgage, but withold £10000 of it just in case works were needed during the term of the mortgage. This effectively ruled it out for me.

[Amy]

Re: mortgage declined

All properties have a certain amount of movement depending on the initial soils on which they are built, the weather conditions and even trees close to foundations can play a part. Settlement, particularly in new builds may be a problem.

Is the lender citing subsidence as the reason for refusal?

[kate2222]

Re: mortgage declined

hi they are saying that because the surveyor will not guarantee further movement then they have declined it, but even the surveyor said no one can guarantee it thats why he put further movement highly unlikely, on past surveys for the same house the wording evidence of movement, any further movement taking place is acceptable. seems so unfair that even a structural engineer has said no further movement and even this is not sufficing them.

[Caspar]

Re: mortgage declined

Is the house in an area known for problems with movement eg where there used to be mines, reclaimed marshland etc....?

[kate2222]

Re: mortgage declined

yes its built on sand. the area is well known for it and all the houses on the road and a few roads around (some worse than others) have suffered past movement. the bit mine is on is not as bad as the ones a 1/4 mile up the road, none of them have fallen down yet and they were built circa 1900.

[Caspar]

Re: mortgage declined

It's really difficult, especially for you as you'll have formed a bond with the house you want. However, sadly the surveyor has to cover their own back as well, hence the comment they cannot guarantee further movement.

You could of course always try a different lender. If you know anyone in the road, have a chat with them and see how they overcame the hurdle as it can't be unique.

[kate2222]

Re: mortgage declined

sorry caspar i should of said, its a remortgage buy to let, i have had 4 past surveys on the property for each new re-mortgage and all the surveys say 'evidence of past movement but risk of future movement acceptable'. many houses have been sold in the area, recently too, and no concerns.

my mortgage broker spoke with the surveyor and accepts that no one can guarantee anything but the surveyor did stress to the lender future movement is highly unlikey, which he said is the same as risk of future movement acceptable. even the surveyor said he cannot understand why the lender has declined.

[Caspar]

Re: mortgage declined

Right - sorry!

Can you not just ask the mortgage lender why they refused you after 4 previous and successful re-mortgage applications?

I don't know of any appeal mechanism for mortgages, so if there isn't one (if there is hopefully someone will post it up) then I guess it's a case of trying other lenders.

Sorry - I feel a bit impotent to be able to help here.

[kate2222]

Re: mortgage declined

hey you help by just listening
apparently there is an appeal mechanism, so the broker today is going to phone aske them why refused and tell them 4 previous surveys have been accepted. he is also going to say if this is their stance on any properties which have historic movement then he will no longer feel confident in giving them any more business, I will keep you posted!

[kate2222]

Re: mortgage declined

100% decline! so a nice complaint letter is coming on!

[Caspar]

Re: mortgage declined

I like writing those! Sorry to hear you''ve been declined though.

Other lenders?

[kate2222]

Re: mortgage declined

any tips on what to put in the letter, greatly appreciated
I have now had an AIP with another lender

[Caspar]

Re: mortgage declined

That's good news! Well done.