Mortgage and me: Buyer recalls nightmare of losing mortgage offer days before exchanging | Personal Finance | Finance
Renting had never been on Liz Hamburger’s map, instead opting to set aside money each month while living with her parents and commuting into London. She gradually saved up, and in December 2016, Liz, now 29, bought her first house with her boyfriend at the time.
Getting a mortgage with a 10 percent deposit, Liz says she had “saved up the bear minimum”, and unfortunately missed out on the Stamp Duty Land Tax relief for first-time buyers by a matter of months.
The mortgage was a three-year fixed deal, and although the relationship didn’t work out, over the next three years, Liz explained she slowly renovated it.
“It was impossible to sell,” she says, explaining the property needed to be “gutted” as it wasn’t feasible to find a buyer otherwise.
“It basically felt like I was saving the money by paying the mortgage each month,” she recalls.
Having carried out the DIY over the course of three years, in January 2020, the sale on the first house completed.
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“I probably broke even,” she says of the sale, “I’d probably have been fine having a bank account for that three years to be honest and it would have been a lot less work.”
The experience of being unable to sell wasn’t one Liz wanted to go through with her next house, adding: “I never wanted to be in that situation again.”
Deciding to amass savings for the next property she would buy, Liz came across the app Lifetise on a Reddit forum.
“I just wanted to make sure I had all my bases like covered this time,” she said, adding that she input her details to generate a savings plan.
Days after the sale of her first purchase completed, Liz and her current boyfriend stumbled across a property they really liked.
They already had a mortgage in principal from the end of the previous year, and the property was about to be reduced.
“It was perfect timing,” she said. “It was like it was meant for us.”
However, it wasn’t long before the impact of the COVID-19 outbreak hit.
“It was a nightmare,” Liz recalls.
Their offer had been accepted, the process with their solicitor had begun, and the couple had their mortgage offer sorted.
The UK began to be affected by the pandemic in March 2020, “and then everything paused,” says Liz.
“When lockdown started, we were a week away from exchanging our contracts and basically completing.
“Then during that time my current boyfriend – he works as a web developer – had a pay cut.”
The pair informed their mortgage company of the pay cut, and their offer was withdrawn.
“That was very stressful because there we had lost our mortgage offer.”
Luckily, they found another offer – and actually ended up with a better rate.
They had used a mortgage broker from the off, a decision which is something Liz is especially pleased about following the first offer having been withdrawn.
“I think it was much easier to have someone who knew exactly what mortgage brokers would be looking for,” she explains.
“Particularly in our situation where my boyfriend had a pay cut because we were just super worried – like when trying to research online lots of people were saying, ‘Oh you don’t because you’ve got your offer you don’t need to say anything’ and then you hear horror stories about people having their offer withdrawn on completions, so then you lose your deposit.
“So it was really handy to have a broker to make sure everything was done properly.”
Living with Liz’a parents at the time, the couple did manage to make some savings on commuting costs as they were working from home in lockdown.
Despite the delay in the process, as lockdown restrictions began to be lifted in June, the couple were finally allowed to move into their new home.
“It was very stressful – having pay cuts – and then seeing all the stuff in the news about all the 10 percent mortgages being removed and that kind of thing, because we went for 10 percent again because we didn’t want to overstretch ourselves.”
Now, the homeowners are saving each month with the intention to overpay, but first, decorating and renovations are on the cards.
They opted for a five-year mortgage, and intend to “chip away” at it via overpayments in the future.
Liz explains their 30-year mortgage term would last until she reaches 60, and adds: “It just feels a bit intense having a mortgage when you’re 60. Even if it was 55, even if we could knock five years off, I think it just feels like a bit of a nicer number – but we’ll see.”