T Break thread 2023

[Adam43]

In the US you have to give a reason why a loan is refused.

I believe in the UK that they have to, at least, tell you the credit agency they used so that you can get a credit report and see if there is something wrong. It might be worth doing that to see if there is a problem. Mistakes and fraud can happen.

Mortgage lenders want to lend you money. Especially at the moment as new business is poor at the moment. They only don’t do it if they see a problem. Although current conditions might mean they are more stringent that previously reflecting the impact of cost of living on all aspects of people’s outgoings. That problem could also be on the asset side.

As a relatively new house does it still have the certificates for all the good stuff in it. Could have ten year warranties for that kind of thing? Although if the previous owner can’t supply I suppose that’s a problem.

[grantp]

Originally Posted by Adam43

In the US you have to give a reason why a loan is refused.

I believe in the UK that they have to, at least, tell you the credit agency they used so that you can get a credit report and see if there is something wrong. It might be worth doing that to see if there is a problem. Mistakes and fraud can happen.

Mortgage lenders want to lend you money. Especially at the moment as new business is poor at the moment. They only don’t do it if they see a problem. Although current conditions might mean they are more stringent that previously reflecting the impact of cost of living on all aspects of people’s outgoings. That problem could also be on the asset side.

As a relatively new house does it still have the certificates for all the good stuff in it. Could have ten year warranties for that kind of thing? Although if the previous owner can’t supply I suppose that’s a problem.

Yep, the house is good for warranties. Better still, the guy that runs the business that provided all of the solar, battery and heatpump facilities as part of the original build lives in the house next door.

The first excuse for refusal (from their current mortgage supplier) was something to do with not feeling the property could be guaranteed as certain security because there is a separate garage building with a fully fitted room available that had the potential to be sub-let.

On that basis, one might wonder how many other properties might have rooms that, in an economic crisis, owners might wish to rent out on a shared facilities basis. What then would the market look like?

No one, even with the lender's mortgage assessment and completion staffers, understood that decision but, having made the decision, the lender refused to re-consider or offer an extended response. Just "No".

At least the surveyor appointed by the new potential lender had the honesty to admit he could not feel comfortable signing off on something he did not know anything about. However, it makes one wonder why they appointed him in the first place.

The additional delay and time wasted while that is sorted out is extremely frustrating for them, the people they are buying from and the people they are selling to. Especially when they had already arranged a facility, in principle, with the previous and pre-existing lender.

There seem to be a lot of things affected by "new regulations" in recent years, some valid but many probably on the basis of over-caution in interpretation of the list of boxes that need to be ticked for Conformance to poorly written and badly understood rules and regulations.

I don't mind regulations, but if one sees a developing pattern of poorer and poorer instructions for ever more intricate regulation, then one has to wonder if the desired result is anywhere near to being achieved. Or even can be achieved.

[Mike Harte]

Grant, I can certainly understand the frustration involved with your tale because I recall my staff having similar problems arranging mortgages for clients on rare occasions 20 odd years ago. In fact my son also came up against something similar when he tried to remortgage his house a few years ago; unfortunately, I had retired by then, so couldn't help directly.

However, at least a proper "surveyor" turned up in your case. Far too often in the past, the "surveyors" appointed by the lenders were really just estate agents and their "survey" often amounted to a mere drive past the potential property sometimes not even stopping to examine the outside. Their valuation would be based on the selling prices of similar properties in the area.

The major reason that I sold up the business was because I felt that financial services and mortgage business was going to hell in a hand-cart, which was just 5 years before it did in 2008. The way things were going it was just inevitable; for example, lenders not requiring any proof of income, just relying on borrowers stating that they could afford the repayments. No wonder that Northern Rock, providing mortgages of 125% of the theoretical value of houses, went bust; others were nearly as bad.

I don't understand the hang-up about the room in the garage, though. If my memory is correct, the Inland Revenue actually permits home-owners to rent out one room without including that revenue in their income. I recall that that was driven by parliament.

[grantp]

Originally Posted by Mike Harte

Grant, I can certainly understand the frustration involved with your tale because I recall my staff having similar problems arranging mortgages for clients on rare occasions 20 odd years ago. In fact my son also came up against something similar when he tried to remortgage his house a few years ago; unfortunately, I had retired by then, so couldn't help directly.

However, at least a proper "surveyor" turned up in your case. Far too often in the past, the "surveyors" appointed by the lenders were really just estate agents and their "survey" often amounted to a mere drive past the potential property sometimes not even stopping to examine the outside. Their valuation would be based on the selling prices of similar properties in the area.

The major reason that I sold up the business was because I felt that financial services and mortgage business was going to hell in a hand-cart, which was just 5 years before it did in 2008. The way things were going it was just inevitable; for example, lenders not requiring any proof of income, just relying on borrowers stating that they could afford the repayments. No wonder that Northern Rock, providing mortgages of 125% of the theoretical value of houses, went bust; others were nearly as bad.

I don't understand the hang-up about the room in the garage, though. If my memory is correct, the Inland Revenue actually permits home-owners to rent out one room without including that revenue in their income. I recall that that was driven by parliament.

Thanks for the input Mike.

I agree totally.

The room on the end of the triple garage is a bit of an odd thing.

There are other aspects to the overall property that could, on that basis, prove more risky for subletting purposes in terms of security. They were not mentioned, so far as I am aware.

The suspicion is that someone senior made a marginal (or worse) decision out of nowhere and is senior enough that they are protected from being called out and having the decision reversed.

Delays are annoying. Maybe worse is that the net costs may increase significantly, at least in the short term.

So little seems to be base on logical analysis from any angle these days.

Govt. apparently scrapping HS 2 North, for example.

I have never been a fan of HS2 but it it had any purpose, linking the North rather than Birmingham seemed more rational and deliverable in terms of journey time gain.

Scotland even more so.

What may now result, for the next generations, makes ever less sense even if people are still permitted to travel anywhere by the time whatever it turns out to be is "functional".