Turned down for lower cost mortgage -advice please!

morveryn

Hubby & I have accepted an offer of £177,000 on our house and we want to buy a house at around £140,000. We are moving to a cheaper area to be nearer family and to save us money - we have a DMP (debt management plan) wuth Payplan. Homes here are £200,000+
We have a mortgage with Northern Rock and after talking to them about this they have said no, they will only lend up to £120,000. Its annoying as we already have a mortgage of £155,000 with them which we have always paid, etc. We have made sure our mortgage payments never lapsed.

Where do we go from here? Are we stuck struggling with our more expensive mortgage? We'd be so much better off if we moved and we'd be able to pay off some of our debt.

sashacat

Try London and Country mortgage brokers to see if they can get you a better deal, ie a lower interest rate as well as a larger sum. I have always found they very good and they do not charge a fee

morveryn

Thank you :-) will give them a try

AndrewSmith

Hi,

Did you have the DMP or the level of borrowing you now have when you took the original mortgage with Northern Rock? I suspect this is the reason they have said the lower amount.

Unfortuantely mortgages are underwritten on your situation as it is right now and does not account for how much mortgage you can afford to pay at the moment.

They will look at your income, then assess your expenditure on such things as loans or the DMP, and make a judgement based on that. Also the fact that you have a DMP in place may exclude certain lenders unless you have never defaulted on any of the liabilities covered under the DMP. The decision will also be based on credit history and your current credit status and score.

I would suggest having a consultation with a broker and get him to show you the various options and what you can and cannot potentially do.

Hope this helps

Andy