Remortgaging

Discussion in 'General Chat' started by ldoodle, Jun 16, 2015.

  1. ldoodle

    ldoodle
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    Hey,

    I'm all for tightening belts and what-not and not lending irresponsibly, but this is just silly.

    I can afford my current mortgage and all other outgoings comfortably. Did an application for a re-mortgage yesterday with a different lender, which will save me £103 a month.

    But I can't afford it apparently. I can't afford to save money.

    Nice one, thicko's....

    Anyone in mortgages able to shed some light?
     
  2. PsyVision

    PsyVision
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    Lie to them on the application? ;) Stupid tho, eh?
     
  3. FZR400RRSP

    FZR400RRSP
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    Those days are gone.
    They want pay slips, bank statements etc.etc.
    Long gone are the days you got your employer to write a letter lying about how much you earn, or forgetting to tell them you have a car loan etc.etc.
     
  4. phillyd1981

    phillyd1981
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    After 2008 banking shambles new rules were put into place on the affordableability Criteria they go into every detail now.
     
  5. imightbewrong

    imightbewrong
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    With the good old self-certification mortgages you didn't even need a letter!
     
  6. ldoodle

    ldoodle
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    Which shows I can afford it, currently and comfortably. So I can even more comfortably afford to pay £103 less.

    "You can't afford to save money". I've asked for it in writing so I can frame it for eternity. The complete joke that it is.
     
  7. imightbewrong

    imightbewrong
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    This is the problem when rules tighten over time. Just be glad as you couldn't get your current mortgage now :)
     
  8. ldoodle

    ldoodle
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    Yes I could, easily. It's only 3.177777777777778 X my (sole) annual salary.
     
  9. Desmo

    Desmo
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    I assume the lending was over the same period as current mortgage?
     
  10. alan280170

    alan280170
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    Would that matter, no mortgage guru, but if it's cheaper how can they not think you can't pay it. Or was it that, yes you can pay it but you don't/can't save which is a weird excuse for turning the OP down.
     
  11. ldoodle

    ldoodle
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    Yes, no change (decrease in term) there.

    Apart from the lender, and the amount (as we've paid some off over the last 2 years) everything else is identical.

    Oh apart from my wage, which has gone up £6k since June 2013.
     
  12. Desmo

    Desmo
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    It could matter in the sense that if you want to spread the same amount over a longer period you are technically a higher risk, especially if that takes you closer to retirement age.
     
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  13. ldoodle

    ldoodle
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    False.
     
  14. ldoodle

    ldoodle
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    Oh I see. I thought you meant if we're decreasing the term (so increasing the payments) it would make it less likely.
     
  15. alan280170

    alan280170
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    I wasn't saying you couldn't, but that was the lenders excuse, yes?
     
  16. ldoodle

    ldoodle
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    The sad thing is, it's a computer saying "no", based on some silly formula. Not a human making a concious decision and taking everything into account.

    Not that their anything to take into account!
     
  17. Desmo

    Desmo
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    I'm no mortgage expert....but I can't see any reason for you being turned down from what you've said apart from what has already been mentioned...things are tougher these days and you don't fit their criteria at the moment, even with a lower payment.
     
  18. ldoodle

    ldoodle
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    Yeah I know :smashin:

    And I don't know what their actual excuse is.
     
  19. alan280170

    alan280170
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    So did you not ask whoever made this ridiculous call (IMO) to speak to his boss?
     
  20. jonna

    jonna
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    Have you a 100% sound financial history with no hiccups?.
     
  21. ldoodle

    ldoodle
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    Got to be careful - the broker is a family friend so can't really be 'pushy' with him, directly.

    He's on the case though.
     
  22. rampant

    rampant
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    what is your %ltv
     
  23. ldoodle

    ldoodle
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    Honestly, I believe so. Basically, we tried with Nationwide (max LTV 60%) and it went through in literally 10 seconds... no problems financially. We're 99.9% certain they (substantially) undervalued our house to push us into the next LTV bracket so the rate/monthly payment went up.

    So we tried with Coventry who had a higher LTV bracket (65%) at not much more a month than Nationwide's better LTV rate, but they've said no to affordability.

    I appreciate each lender has different criteria, but as to affordability I think they'd be pretty similar. For Nationwide to say "yes" instantly and Coventry to say "no" instantly is odd, especially as it's a decrease in costs (over 14.5% decrease).
     
  24. Desmo

    Desmo
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    But they're all willing to accept different amounts of risk....it is what their entire mortgage business model is based on. Just like car insurance can range hugely from one company to another. Some want your business, others don't care if they get it or not.
     
  25. ldoodle

    ldoodle
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    That's a "problem".. As it's a re-mortgage, there's no accurate valuation of the house. Inferior houses in inferior areas (but same postcodes) have sold for £250K+ (3 bed semis). The broker gave 4 examples to Nationwide of actual recent sales.

    They're all on busy main roads and ours is in a really quiet cul-de-sac, so would realistically sell for over £250K easily.

    Nationwide valued it (drive-by-evaluation, seriously) at £225K. No reconsideration (we tried) unless there's been structural extensions.

    That valuation puts the LTV at 63%. A true valuation would be under 60%.
     
  26. imightbewrong

    imightbewrong
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    There's more to it than just that. It's their rules - not just what you can 'afford'.
     
  27. mikes48

    mikes48
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    Simply putting a number of applications in to different lenders can adversely affect your credit rating too.
     
  28. RuddyRoad

    RuddyRoad
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    I appreciate the frustration the OP must be experiencing but to me it would be amazing if this kind of situation didn't arise. When the original mortgage was taken out the rules of affordability were less stringent. They've now tightened up so it stands to reason that some lenders will decline at a certain interest rate because the applicant fails the affordability test. Charging a higher interest rate negates some of the risk which might explains why Nationwide chose to undervalue the house.

    Sounds like the OP is caught in a situation where he/she can afford it but is now struggling to convince the mortgage supplier. As I say, very frustrating.

    Would it be worth contacting the existing lender to explain you were thinking of moving to a better rate and could they offer you anything?
     
  29. SteveCritten

    SteveCritten
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    Does your current lender not do a better rate? I looked at remortgaging but with fees I was better off with a fixed rate with my current lender despite a slightly higher %.
     
  30. Mr_Wistles

    Mr_Wistles
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    We tried to remortgage the house about 10 years ago. Was given a ridiculously low valuation, they justified it by comparing my property to ones over a mile away.

    I sold the house, got the offer in writing and then gave it to the mortgage firm who changed their offer.
     

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