I am writing this on the back of one of our applications.
In 14 years advising this is the first time it has ever happened!
The first thing I would say is do not panic. If you have found this page because you need to request an extension, then I think it is important to start by saying the likelihood of it being declined is very slim. As mentioned it has never happened to us in over a decade!
My extension request has been declined
If your request has already been declined, that changes things and so you may already have started to panic.
I thought it best to use our real life example to hopefully help you with your situation.
In this example, the applicant was looking for a 90% mortgage. Their situation was quite tricky in that they had built up a lot of debt and missed a couple of payments in the time between the original application/offer and the extension.
There was a reason for this which I do not think we need to go into but ultimately it meant we were not looking at an applicant who had built up a lot of debt and had missed payments on their credit report.
PANIC!
I started research the new set of circumstances and I was really struggling. To the point where I thought I was going to have to tell the applicant I could not help!
Reasonably small deposit, rising debt and current missed and late payments – it was not ideal. Because of everything combined we did not even have adverse lenders open to us.
I was starting to get concerned about this application and was unsure what we would do.
In the end, we have 2-3 building societies that we have a good relationship with. I explained the situation to them and they asked me to send over the credit report.
They took a look at everything and you could see on the credit report, in a 6 year history everything was perfectly fine bar the last 5 months. His “story” (for want of a better word) stacked up and made the sense. We were able to get this over the line and a new offer was issued.
Success
This was a very unusual case. He went from high street to not even adverse lenders wanting to lend to him in 6 months.
Thankfully we were able to find a lender with that human touch. The frustrating thing is that the original application was made before the war in Iran started. The new application was made afterwards in a time of higher interest rates. That being said, it was only around 0.7% higher than the original application (and around 0.3% higher than the high street at the time).
Summary
All things considered, I think we did really well here.
Everything became a little stressed, but the applicant was great in trusting us (I think it helps we had been doing mortgages for his mum for a few years). We had to do a lot of research and have a lot of conversations, but in less than a week we had got to the point where we were able to instruct a new valuation.
We kept the estate agents in the dark until we had to let them know what was going on so that kept some of the pressure off also.