Can a loan be denied after letter of commitment or even further in the process?

EZ26

Hi,

I'm considering to apply for a loan but I've found some pretty scary information online about how purchasing a property works.

I've found that even after the letter of commitment or the clear to close the bank can still refuse to pay the loan!

Is that true?

If it is this means that I could lose the 10% deposit = better renting

heebusjeebus

EZ26 wrote: »

Hi,

I'm considering to apply for a loan but I've found some pretty scary information online about how purchasing a property works.

I've found that even after the letter of commitment or the clear to close the bank can still refuse to pay the loan!

Is that true?

If it is this means that I could lose the 10% deposit = better renting

There is usually a stipulation in the contract with the property vendor that if the lender pulls out, through no fault of yours, you can redeem your deposit.
That's what I was told by my Solicitor anyways.

Victor

Buying property is usually "subject to mortgage and survey". If you don't get a mortgage, you aren't on the hook.

EZ26

Thanks guys this helps!

So I have to check that I have a clause in the contract that says that right?

Thanks

EZ26

Another bug I have in my head is about the Clean Title: can I assume that because a solicitor and the bank are involved there is no chance that I buy a property with problems? Or is it still possible?

Thanks in advance for your help

whomitconcerns

EZ26 wrote: »

Another bug I have in my head is about the Clean Title: can I assume that because a solicitor and the bank are involved there is no chance that I buy a property with problems? Or is it still possible?

Thanks in advance for your help

It's still possible. But it's your solicitors job to prevent that. Onus and responsibility is on them,

EZ26

thanks whomitconcerns, does that mean that if something like that happen I can sue the solicitor for damages?

Even if that's would be the case at that point it would be a catastrophe because I should pay both mortgage and rent (unless I learn to live in my car).

I really don't get how this things can happen, there should be many controls in place to avoid to ruin people lives

tedpan

EZ26 wrote:

thanks whomitconcerns, does that mean that if something like that happen I can sue the solicitor for damages?

You haven't even started the process and you're thinking about suing people. Madness

EZ26

I understand tedpan, but I'm asking exactly because if I see that it doesn't suit me I'll probably continue to rent.

Sorry, I don't wanna hurt anyone feelings...

tedpan

EZ26 wrote:

I understand tedpan, but I'm asking exactly because if I see that it doesn't suit me I'll probably continue to rent.

EZ26 wrote:

Sorry, I don't wanna hurt anyone feelings...

Don't worry, you're not hurting any feelings. You should find a good solicitor, have a chat and iron out any concerns you have.

Your statement on continuing to rent sounds like you don't want to make a 20-40 year commitment though..

EZ26

of course I'll find a solicitor (hopefully a good one) but I was asking because I wasn't sure of something I've found online.

In any case a 20-40 years commitment is something difficult in any case, but if you add to this the risk of losing a 10% deposit or even worse to purchase a property without a clean title, then it's more like a nightmare!

EZ26

In any case, if you know, in a scenario where the solicitor doesn't see a problem on the title and the sale closes, what happens next? Does the bank pause the mortgage as an help to the buyer or just keep asking for the money?

Please if you think I'm too paranoid, I don't need to hear that, I already know

whomitconcerns

EZ26 wrote: »

In any case, if you know, in a scenario where the solicitor doesn't see a problem on the title and the sale closes, what happens next? Does the bank pause the mortgage as an help to the buyer or just keep asking for the money?

Please if you think I'm too paranoid, I don't need to hear that, I already know

If the sale closes the money is transferred and that's it done.

EZ26

So, if then there is a problem with the title and I can't live in the home at that point I'd have to pay the mortgage and the rent somewhere else...

server down

EZ26 wrote: »

So, if then there is a problem with the title and I can't live in the home at that point I'd have to pay the mortgage and the rent somewhere else...

If there’s a problem with the title noticed during the process you won’t get the mortgage.

EZ26

Oh OK, this is useful! Thanks