Held to ransome!

wendywend

Yes, that's just how I feel!

We wanted to port oue mortgage across to a new less valuable property to release some equity to pay off some of the £91500 mortgage we have. We do not want to change anything about the mortgage as we are "Fixed" until Nov 2009. Our financial advisor was informed by the mortgage company that there would not be a problem. Why then did we have to "apply for a new mortgage" with an "arrangement fee of £502" when basically all we require is the address changing on the Mortgage Agreement. We are still only borrowing 63% of the value of the new property and our income is exactly the same as it was 9 months ago when we re-mortgaged our present property.:mad:
We have now been informed by our mortgage company that "unfortunately" they are "unable to offer us a mortgage at this time". We already have the mortgage we just want to change the property it's secured on!! or are me and my husband just being thick!!

Can anyone shed any light on our plight as we feel we are being held to ransome!!

SquatNow

Your financial advisor was telling porkie pies to get the commision.

Sorry.

_Andy_

Unfortunately portability is never guaranteed.

wendywend

That's not very helpful Squatnow.

I am sure my Financial advisor would not "rip me off" as he has nothing to gain from me as i am arranging everything myself!! Are you always so cynical or does it go with the territory?

SquatNow

wendywend wrote: »

That's not very helpful Squatnow.

I am sure my Financial advisor would not "rip me off" as he has nothing to gain from me as i am arranging everything myself!! Are you always so cynical or does it go with the territory?

While you may be arranging it yourself, he may well still get an introductory fee.

To be fair on him though, rather than being a sneaky con artist, he could just be an incompetant twit.

barnaby-bear

wendywend wrote: »

Yes, that's just how I feel!

We wanted to port oue mortgage across to a new less valuable property to release some equity to pay off some of the £91500 mortgage we have. We do not want to change anything about the mortgage as we are "Fixed" until Nov 2009. Our financial advisor was informed by the mortgage company that there would not be a problem. Why then did we have to "apply for a new mortgage" with an "arrangement fee of £502" when basically all we require is the address changing on the Mortgage Agreement. We are still only borrowing 63% of the value of the new property and our income is exactly the same as it was 9 months ago when we re-mortgaged our present property.:mad:
We have now been informed by our mortgage company that "unfortunately" they are "unable to offer us a mortgage at this time". We already have the mortgage we just want to change the property it's secured on!! or are me and my husband just being thick!!

Can anyone shed any light on our plight as we feel we are being held to ransome!!

So the LTV will change?

TomsMom

The way I understand it is that when you sell your house and move to a new one then the mortgage on house A has to be paid off and a new mortgage taken out on house B. Years ago I used to work for a building society and in the 20+ years I worked there I never heard of transferring a mortgage from one property to another. When buying a new house there are searches to be made, a valuation to be carried out, etc., before a mortgage is granted.
It was always a case of sell the original house to buy the new one.

Why didn't you make enquiries of the mortgage company yourself then if you had been given the information that your financial adviser says he was given, then consequently turned down, you would have had some recourse with the mortgage company and would have been able to name the person who gave the original information.

But then again, I've been around a long time and have learnt not to trust people, I like to get information straight from the horse's mouth.

dander

Don't forget that when you take out a mortgage on a house a mortgage company has to be sure that it's happy to take that particular house as security - this is why you have a valuation carried out by them, and why certain companies will have certain types of houses they are not prepared to lend on. Even though to you it's just moving the mortgage from one house to another, to them it's a major change to the security of their loan. So they would want to carry out all the same checks on the property that they did in the first place - so the cost to them is pretty much the same as it is for a brand new mortgage, hence the fees.

Plus of course, with the 'credit crunch' mortgage companies have majorly tightened up on lending - house prices are plummeting partly because a lot of people simply can't get mortgages any more - due to mortgage companies not liking their houses, or not liking their credit record, or the company itself just having run out of money to lend.

Add to that the increase in LTV - and although you say it would be 63%, where are you getting that figure from? You may find the mortgage company consider the value of the property to be considerably less than you do, and the subsequent LTV considerably higher.

barnaby-bear

dander wrote: »

Add to that the increase in LTV - and although you say it would be 63%, where are you getting that figure from? You may find the mortgage company consider the value of the property to be considerably less than you do, and the subsequent LTV considerably higher.

Woolwich dropped their basic tracker LTV from 95% to 60% earlier this year...

silvercar

New mortgage = new lending decision.

All porting means is that they will let you take your current deal with you to your new property, provided you and the property meet their current lending criteria.

Say you had a £50k mortgage on a £100k property and decided to trade down, now you want a £50k mortgage on a 60k property. You say your mortgage is the same, they say there is a greater risk to them as you are borrowing around 82% of the property value rather than 50%.

Say you had a 50k mortgage on a 100k property and wanted to reduce it to a 25k mortgage on a 50k property. You say same percentage, they say your deal was for 50k so by reducing mortgage there are redemption fees to pay. Or they say they have a policy of not lending below 30k as admin costs make it unprofitable.

Say you had a mortgage 5 times your salary, now they say they don't lend more than 4 times salary. You say they did it before, they say they don't anymore, so a new application fails.

You have 2 options, pay the redemption penalty and get a mortgage elsewhere or don't move until the redemption penalty deadline has passed.

macaque_2

wendywend wrote: »

That's not very helpful Squatnow.

I am sure my Financial advisor would not "rip me off" as he has nothing to gain from me as i am arranging everything myself!! Are you always so cynical or does it go with the territory?

Squatnow's cynicism is well placed. Dealing with an estate agent is like dealing with a wasp. You feel the pain of their sting very quickly. Financial advisors are like mosquitoes. They bury their probosis into you but you feel no pain. Years later you discover that the pension or endowment policy they arranged for you is about as desirable as malaria or sleeping sickness.