mortgage problems

superweld

Hi,

I have a mortgage problem and could use some advice...

Basically I wanted to buy a house so I applied for a 100% mortgage, through a broker.

The broker came back with results telling me all was well, I could borrow just over 200k. I was told I just needed to find a house, book it, find a solicitor and then come back to him and finalise the details. We had gone through the rates and decided on a fixed term 3yr rate and had the monthly repayments worked out. All seemed pretty straight forward.

Basically, I then paid a deposit on a house which was less than that value (the value the broker said I was ok to borrow). Got myself a solicitor and spoke to my mortgage broker to make sure all the details were sorted. He then told me that I had only been approved for a 95% mortgage BUT this would be no problem. He knew the seller and got a letter from them saying there were additions to the house which brought the value up... so that 95% of this sum is what I needed. He told me that with this particular lender, they did not require to see the contract once the solicitor had handled things, and that he had spoken to my solicitor and had squared it all.

The reason he was doing this, as he said was because I was so close (time wise) to getting a 100% mortage that he would make an acception and this is what he has told the seller to get that letter with the alternate price.

All this seemed reasonable to me at the time, especially since a well respected estate agency were willing to cooperate, and a well known local solicitor was willing (once he didn't have to forge anything as this lender did not require to see contract) This broker is also well known and was even recommended to me by the sellers.

The problem started when I met the solicitor to sign initial contract. He told me he has spoken to the broker alright but I got the impression he wasn't 100% happy with the whole situation. He looked through the loan proposal and spotted something he did not like and then basically said, I'm sorry but I cannot do this, I know there are others who will but I'm not interested.

I was fairly annoyed and dissapointed at this stage. I rang the broker and explained what happened. I asked could I re-apply for 100% as it had been several months since my initial enquiry. He said I could but then they would ask why the value of the house had changed. He said he would find me a solicitor who would do it and at the worst he knew someone from a different county who would definitely do it. I have been calling him this week and he told me yesterday that four solicitors had said they were not interested and he had one still to come back. He also mentioned again that he had a friend who would definitely do it.

My gut feeling is to get the hell out of this situation. My head agrees. The thing is I have had my heart set on this for months and have even spent some money. I got variation done to the house costing me €500. I would lose this but that is small money in the big scheme of things. I have not signed anything, I have just basically paid a deposit which is fully refundable.

If he tells me the last local solicitor will do it, then I might go 'ok' but if it comes down to some dodgy friend from another county I'm thinking 'no way'.

Has anyone had any similiar experience or advice???

MysticalSoul

I would steer well away from such a situation. First of all, it is illegal, and the broker should not have promised anything he could not deliver. No Solicitor in their right mind would touch it. I would say try and reapply for the 100%, even if with a different bank - at least then everything would be above board. Just my two cents...

templetonpeck

The broker is being highly inappropriate and is now, I'm sure at this stage, jeopardising your deal with this house with the delay in signing Contracts.
I have come across some brokers like you're describing, they try everything open to them to try and secure a client, whether by legal means or not.

What I would say to you is:-

1. You've paid a booking deposit presumably to the auctioneer from your own pocket. Would this equate to 5% of the purchase price? If so, this would mean that your 95% mortgage approval is within budget?

Although I realise this means that you won't be reimbursed for your booking deposit, it means that you can proceed and sign Contracts and takes you out of danger of the sellers withdrawing.

2. Find out from the broker what banks he applied to. If there's a bank he hasn't tried, you might want to approach them yourself, though this means a whole new loan application. EBS Building Society don't deal with brokers, so he definitely wouldn't have got a quote from them, so you might like to see if they'll offer you a 100% mortgage.

I know First Active, Ulster Bank and Bank of Scotland are fairly amenable to 100% mortgages, make sure the broker has approached them and not just the Banks he prefers because of commission payments etc.

I certainly would not proceed with false statements as regards the valuation of a property. If four solicitors have already walked away from it, that speaks volumes.

superweld

ok thanks...

the booking deposit is actually 2.1% approx and yes this was paid by myself.

the problem is, even if I did not get reimbursed and sorted it that way by adding some more of my own money, there is still the problem of the false value of the house.

I can see no other way other than cancelling this whole thing now. I can re apply for the 100% I suppose. The house is due to be ready in about 6 weeks. I dont't know what will happen as I am new to all of this.

iguana

Are you sure you don't want to take this as a sign to reconsider buying right now? Take a look at this http://www.independent.ie/business/irish/builders-feel-the-heat-as-sales-of-new-homes-stall-1039882.html or the housing bubble bursting thread.

superweld

the house is gonna cost under 200k so it's the bottom end of the market so i'm not terribly worried about losing money on it, it's just somewhere to live rent free until i sell. any profit is a bonus.

what else is someone to do? in a few years are interest rates gonna drop? if so one can renegotiate their mortgage can't they?

incidently i've decided to reapply for 100%. if it goes wrong and i lose the house then at least i'll sleep guilt free in my parents house for another while

templetonpeck

superweld wrote:

the house is gonna cost under 200k so it's the bottom end of the market so i'm not terribly worried about losing money on it, it's just somewhere to live rent free until i sell. any profit is a bonus.

what else is someone to do? in a few years are interest rates gonna drop? if so one can renegotiate their mortgage can't they?

incidently i've decided to reapply for 100%. if it goes wrong and i lose the house then at least i'll sleep guilt free in my parents house for another while

Don't get me wrong, I wouldn't in anyway suggest that you do things the brokers way. As I said before, if four solicitors have turned their backs on it, it's got to be a non runner.

What I meant was, if there was a way you could go with the 95% mortgage with a true valuation, that might be an option.

It's such a shame if you have to say no to the house because of that dumb broker!!

jubi lee

i can't believe this is a well known broker??? are they national or local??

i'd be steering well clear. sounds as dodgey as hell, plus a valuer is sent out by the mortgage company before they draw down your mortgage loan offer so will they not find out the price has been wrongly valued??

i've used Simplymortgages.ie (gerald) 3 times now and they are brilliant, change your broker...

dame

jubi lee wrote:

change your broker...

......or stay away from brokers altogether. What's stopping you from talking to the banks yourself? The application forms aren't that complicated and you've already gathered up all your pay cheques, bank statements etc so you have everything you need ready to apply.

iguana

superweld wrote:

the house is gonna cost under 200k so it's the bottom end of the market so i'm not terribly worried about losing money on it, it's just somewhere to live rent free until i sell. any profit is a bonus.

Is the house a bargain compared to those around it or is it average for it's market? The house might be cheaper than many in the country but that doesn't mean it's market value can't go down. How would you feel if in 18 months the house was worth €150k? Does the underhanded dealings of your broker, the EA and the vendor and the reluctance of the bank to lend not tell you that there is a desperation to sell houses? And have you worked out how much of your mortgage repayment is interest in the first few years? It's possibly more than the rent on a similar property.

At the very least if you are determined to buy the house go back to the vendor say you can't get the approval you need and offer a lower price.

Do-more

jubi lee wrote:

i can't believe this is a well known broker??? are they national or local??

i'd be steering well clear. sounds as dodgey as hell, plus a valuer is sent out by the mortgage company before they draw down your mortgage loan offer so will they not find out the price has been wrongly valued??

i've used Simplymortgages.ie (gerald) 3 times now and they are brilliant, change your broker...

I guess you didn't see Prime time investigates so!

the_syco

superweld wrote:

The problem started when I met the solicitor to sign initial contract. He told me he has spoken to the broker alright but I got the impression he wasn't 100% happy with the whole situation. He looked through the loan proposal and spotted something he did not like and then basically said, I'm sorry but I cannot do this, I know there are others who will but I'm not interested.

Go baack and ask him what was wrong. Sure, someone else may be able to do it, but they may have refused, as they may know that you're gettting fúcked.

superweld

jubi lee wrote:

i can't believe this is a well known broker??? are they national or local??

i'd be steering well clear. sounds as dodgey as hell, plus a valuer is sent out by the mortgage company before they draw down your mortgage loan offer so will they not find out the price has been wrongly valued??

i've used Simplymortgages.ie (gerald) 3 times now and they are brilliant, change your broker...

this is where the letter from the seller saying there was additions to the house that made it more expensive than the others in the estate came in.

superweld

jubi lee wrote:

i can't believe this is a well known broker??? are they national or local??

i'd be steering well clear. sounds as dodgey as hell, plus a valuer is sent out by the mortgage company before they draw down your mortgage loan offer so will they not find out the price has been wrongly valued??

i've used Simplymortgages.ie (gerald) 3 times now and they are brilliant, change your broker...

yeah well known locally I suppose but part of a national network of brokers.

superweld

the_syco wrote:

Go baack and ask him what was wrong. Sure, someone else may be able to do it, but they may have refused, as they may know that you're gettting fúcked.

it was just that they requested proof of funds for the balance of the house i.e the other 5% that didn't exist. he just seemed to think that this the lie getting deeper.

superweld

iguana wrote:

Is the house a bargain compared to those around it or is it average for it's market? The house might be cheaper than many in the country but that doesn't mean it's market value can't go down. How would you feel if in 18 months the house was worth €150k? Does the underhanded dealings of your broker, the EA and the vendor and the reluctance of the bank to lend not tell you that there is a desperation to sell houses? And have you worked out how much of your mortgage repayment is interest in the first few years? It's possibly more than the rent on a similar property.

At the very least if you are determined to buy the house go back to the vendor say you can't get the approval you need and offer a lower price.

it's a new house so I can't offer a lower price. I doubt the value would drop to 150k considering it is not over priced now. the houses that will drop in value are the ones that ARE over priced.

maybe i am wrong though.