Santander not so portable mortgage, help
TINKERBELL
Posts: 53 Forumite
Has anyone experienced difficulties porting their mortgage since the new lending rules came into force? We have a flexible portable tracker mortgage on an extremely low rate. We aren't asking to borrow any extra money or to extend our length of mortgage term, yet Santander have put us through nearly 2 hours of telephone interview for an affordability check, asked for numerous amounts of paperwork and now an accountants certificate!! Before they will even start the application off. Then apparently there will be another hour and a half telephone interview!?? We are company directors of a Limited Company. I understand the FCA states that there are special arrangements in place to protect existing borrowers and that the lenders are ignoring this and incorrectly insisting borrowers who apply to port, go through these new affordability assessments. Despite the FCA stating, "If a customer wants to port and there is no extra money being raised or a change to the mortgage terms that is likely to make a difference to affordability, there is no need to undertake an affordability assessment." I assume this is a way to refuse porting mortgages for customers on very cheap tracker loans; too costly for the lenders!! Constructive advice would be much appreciated as we don't wish to lose the house we wish to purchase (tight time schedule as new build) or our chain.
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Comments
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Mortgages aren't portable. Porting relates to the rate only.
You're in effect taking out a new mortgage against a new property, so it's pretty standard that the lender will want to perform checks.Slummy mummy!0 -
I understand the point the OP is making, and I don't think the semantics of porting a "mortgage" - or porting a "product" really matters here. The OP is pointing out that from his/her perspective it doesn't make sense to have to go through affordability assessments if the product rate, T&Cs and amount borrowed is remaining exactly the same and that guidance on EU rules suggests her lender doesn't have to do that.
The only counter I can offer to this is; whilst lenders may be given leeway in some circumstances to overlook affordability checks, it really doesn't mean the lender should (or must) overlook them - regardless of FCA guidance on the matter - if they have reason to believe affordability may materially change with a move to new property or that your circumstances may have changed over time.
Firstly, when some people move house, their household finances can and often do change quite considerably, for example council tax rates and travel costs. It is not really the same as just changing products whilst staying in the same house. I myself am moving home shortly to a few towns away (fingers crossed) and this move alone is adding +£50 a month in council tax, +£170 a month in travel costs and +£80 a month in dog walker costs to my expenses. And whilst you may argue that these things don't apply to your specific scenario, it does illustrate why a lender may go through the affordability checks again with a house move.
Not to mention that their internal criteria in general may have changed over time. And that may well include their risk underwriting in regards to self employed people, whos financial situations can vary dramatically over time.
I realise you are looking for practical advice here, but I really don't see you have much choice but to go through your lenders process here. It is doubtful you will be successful in getting them to "skip" and I doubt any regulator will side with you on any kind of complaint about this, as these checks really are reasonable and permitted and even if a complaint to someone where a possibility that is unlikely to be resolved quickly and so it is not really going to help your immediate situation.
Sorry but I think you are stuck with this, if keeping this product rate is important to you.0 -
Thank you for your reply, yes I do know that, but as posted above the FCA state "If a customer wants to port and there is no extra money being raised or a change to the mortgage terms that is likely to make a difference to affordability, there is no need to undertake an affordability assessment." The FCA go on to state that those borrowers should not be subjected to the new assessments. However in this case and many more, the lenders are ignoring special arrangements that were introduced to protect existing borrowers.
Any other MSE followers experienced this? How did you handle it? Maybe we should complain to the FCA?0 -
Thank you for your reply. Yes I think you may be right but I will still talk with the FCA as there is no protection for borrowers and the FCA should insist that the lenders follow their regulations. The lender is obviously not happy that we are on such a very cheap tracker rate, losing them money!0
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Forgot to say, good luck with your move0
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I agree, complain to the FCA, Santander do not seem to be following their advice.0
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Tinkerbell
Lender do underwrite fresh when borrowers seek to port regardless of what you may since in terms of FCA guidelines.
No doubt Lenders are taking the view, better to be safe than accused of recklessness by the Regulator, Press, Government, later.
For smooth resolution and to avoid even less meeting in Branch, use a mortgage broker.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
TINKERBELL wrote: »I understand the FCA states that there are special arrangements in place to protect existing borrowers and that the lenders are ignoring this and incorrectly insisting borrowers who apply to port, go through these new affordability assessments. Despite the FCA stating, "If a customer wants to port and there is no extra money being raised or a change to the mortgage terms that is likely to make a difference to affordability, there is no need to undertake an affordability assessment."
The FCA merely states that checks are not necessary. Lenders can still impose any checks they wish. Perfectly normal for lenders to treat a port as a new mortgage application as that what it is.0 -
You would need to complain to Santander and then the Financial ombudsman - not the FCA. All of that can take a month or 2 if not longer.
Santander are under no obligation to allow you to port (if you do not fit their current criteria), regardless of FCA guidelines (not rules). I think they are using their stock answer and also it is an opportunity to get rid of you (so to speak) or put you on a higher rate, but I could be being cynical. Either way, you can not force them to do it, you can only push it and see if they will back down.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Thank you all for your replies and yes ACG I think that is exactly what they are trying to do!0
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