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lender declined borrowing due to tenancy contract

lender declined borrowing due to tenancy contract

Postby lentement » Fri Sep 25, 2015 1:30 pm

I made an application to my buy-to-let lender for a further advance which was accepted in principle but later declined. The lender gave the reason that they could in theory have problems repossessing the property as my tenant had paid for the year upfront.

I wish to challenge the lender's decision. My tenant who is a friend says he is more than comfortable signing an agreement where by he agrees to vacate the property at the request of the lender in the unlikely event the property were to be repossessed. Do you think this would be a plausible and legal solution?
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Re: lender declined borrowing due to tenancy contract

Postby atticus » Fri Sep 25, 2015 1:36 pm

This is a matter of the lender's policy. Ask the lender.

why should your tenant, having paid the full year in advance, sign such a document? This reeks of all not being as it seems.
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Re: lender declined borrowing due to tenancy contract

Postby Millbrook2 » Fri Sep 25, 2015 3:08 pm

With normal mortgages it's common that someone over the age of 18 but not on the mortgage to sign something similar so the lender may go for it. Try them.
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Re: lender declined borrowing due to tenancy contract

Postby lentement » Fri Sep 25, 2015 4:13 pm

The tenant is a long standing friend and knows that I will not default on the mortgage or leave the property exposed to being repossessed and is just trying to help out.
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Re: lender declined borrowing due to tenancy contract

Postby atticus » Fri Sep 25, 2015 4:43 pm

lentement wrote:The tenant is a long standing friend and knows that I will not default on the mortgage or leave the property exposed to being repossessed and is just trying to help out.
Help in what way? paying a year up front suggests that you may be in need of financial help. This is not a normal thing for a tenant to agree to do.
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Re: lender declined borrowing due to tenancy contract

Postby dls » Fri Sep 25, 2015 5:02 pm

Such an arrangement would not be welcome to a lender, and the sort of document suggested to be offered will be of no real assistance.
Sorry.
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