Not upheld: Mortgage administration / arrears handling complaint against Godiva Mortgages Limited

Decision detail

Summary

Mr R applied for a buy-to-let mortgage with Godiva in April 2023 and received an offer. Subsequently, his solicitors informed Godiva that part of the deposit was being gifted and part was being borrowed via a personal loan. Although Mr R's broker later clarified the loan was for legal fees and stamp duty rather than the deposit itself, Godiva withdrew the mortgage offer as its lending criteria does not permit borrowed funds to be used for deposits. The ombudsman found that Godiva was entitled to withdraw the offer based on its risk appetite and lending criteria, as it had not been aware of the additional borrowing at the time of the original application. The complaint was not upheld, and no compensation beyond the £75 already paid was ordered.

The Ombudsman's reasoning

The ombudsman found that lenders are entitled to decide what risks they will accept based on their lending criteria and risk appetite. Godiva's lending criteria does not permit money that must be repaid to be used as a deposit. The mortgage offer contained a term allowing withdrawal if new information emerged that would have prevented the original offer. Since Godiva was unaware of the additional borrowing at application stage, and this information would have affected its affordability assessment and risk decision, it was entitled to withdraw the offer when this information came to light.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website