C&G not allowing us to port on like for like basis rant

Berger_3

As per title, this is more of a rant than anything else but Im interested to hear peoples own experiences about this situation.

Me and partner took out 95% mortgage on 179k flat 2 years ago on a 3 year deal (ERCs currently £5000) before it all kicked off.

We have carried out a lot of renovation including new kitchen, bathroom, and complete redecoration, none the less being a flat, as to be expected it has taken a hit, and we are likely to get around the 175-170k mark, with the mortgage currently being at around 168k, so we have less than 10% equity.

we have found a 3 bedroom town house in need of modernisation for the same price as our flat, an identical average condition property is for sale at 230k+ a few doors down, so this property has tons of potential, whereas our flat now has none, we have exhausted it all.

Contacted C&G to sound them out about this and they have advised us that we can port the mortgage but need to stump up 10% (16k) to bring the mortgage to 90%, even though we just want to keep everything on a like for like basis, they wont let us. we have money for agents fees (£3k) legal, and some for a bit of renovation, but not an additional £10K+ to reduce our mortgage (or look for a more expensive property)

Now dont get me wrong, I know this is their perogotive, and I know why they are doing it, they we would rather we slung our hook (the guy was encouraging us to look elsewhere) but that simply isnt going to happen: we are not paying them the £5k redemption fees, not to mention the fact that there are no products available with any other lenders, so either way we are staying put, so they are basicaly trapping us and stopping us improving our lot in life for the sake of doing so, they will be no worse off by letting us move, but will have a property that is better security for them in the long term.

I would just like to add that up untill April (redundancy) I had been a Mortgage advisor with a major High street lender for 5 years, so I know how these things work, and I know that with my previous employer, when it came to this situation, they WOULD look at things on an individual basis, it was possible to want we want to do with them. Our incomes ar the same, our credit ratings are good, it is purely a like for like basis that we want to do this. Not to mention the benefit to the economy, estate agent gets his fee + vat, hips, + vat, legal fees + vat, building work + vat, multiply this by the thousands of people in the same boat, and you get a situation the governement supposedly want, people spending their money, paying back some of that £17 billion we lent to lloyds/C&G

The advisor I spoke to on the phone was very flustered when challenged and couldnt come up with a plausible explanation, but interestingly our mortgage agreement (the one we signed) states the following uner porting the mortgage " if you move house, provided that we are satisfied with the property and that you can afford the repayments, You can take the mortgage with you"

No mention of LTV in that statement, so I intend to push this as far as I can (probably futile but it will make me feel better anyway)

Rant over, so what are peoples experiences/views situaton?

opinions4u

Berger_3 wrote: »

Contacted C&G to sound them out about this and they have advised us that we can port the mortgage but need to stump up 10% (16k) to bring the mortgage to 90%, even though we just want to keep everything on a like for like basis, they wont let us. we have money for agents fees (£3k) legal, and some for a bit of renovation, but not an additional £10K+ to reduce our mortgage (or look for a more expensive property)

Their maximum loan is 90%. As is just about every other lender in the country. If you can find anybody who will go above 90% for a homemover post the details here.

Now dont get me wrong, I know this is their perogotive, and I know why they are doing it, they we would rather we slung our hook (the guy was encouraging us to look elsewhere) but that simply isnt going to happen: we are not paying them the £5k redemption fees, not to mention the fact that there are no products available with any other lenders, so either way we are staying put, so they are basicaly trapping us and stopping us improving our lot in life for the sake of doing so, they will be no worse off by letting us move, but will have a property that is better security for them in the long term.

Nonsense. They are saying, as you well know, that times have changed. 95% loans are a thing of the past and they need you to put in a 10% deposit. Like every other customer must.

I would just like to add that up untill April (redundancy) I had been a Mortgage advisor with a major High street lender for 5 years, so I know how these things work, and I know that with my previous employer, when it came to this situation, they WOULD look at things on an individual basis, it was possible to want we want to do with them. Our incomes ar the same, our credit ratings are good, it is purely a like for like basis that we want to do this.

Times change.

Not to mention the benefit to the economy, estate agent gets his fee + vat, hips, + vat, legal fees + vat, building work + vat, multiply this by the thousands of people in the same boat, and you get a situation the governement supposedly want, people spending their money, paying back some of that £17 billion we lent to lloyds/C&G

They won't ever repay it if they continued lending 95% to people in an unstable economy where people are losing jobs and house prices have fallen massively.

You're also well aware that most of that £17bn has nothing to do with C&G mortgage lending is is predominantly down to poor corporate lending by Bank of Scotland.

The advisor I spoke to on the phone was very flustered when challenged and couldnt come up with a plausible explanation, but interestingly our mortgage agreement (the one we signed) states the following uner porting the mortgage " if you move house, provided that we are satisfied with the property and that you can afford the repayments, You can take the mortgage with you"

Well they're not satisfied with the property if you want to borrow over 90%.

No mention of LTV in that statement, so I intend to push this as far as I can (probably futile but it will make me feel better anyway)

Completely futile.

Berger_3

opinions4u wrote: »

Their maximum loan is 90%. As is just about every other lender in the country. If you can find anybody who will go above 90% for a homemover post the details here.

Nonsense. They are saying, as you well know, that times have changed. 95% loans are a thing of the past and they need you to put in a 10% deposit. Like every other customer must.

Times change.

They won't ever repay it if they continued lending 95% to people in an unstable economy where people are losing jobs and house prices have fallen massively.

You're also well aware that most of that £17bn has nothing to do with C&G mortgage lending is is predominantly down to poor corporate lending by Bank of Scotland.

Well they're not satisfied with the property if you want to borrow over 90%.

Completely futile.

Thank you for your comments, but they are all completely irrelevant on the basis that:

In either situation we will be staying with C&G with same size mortgage and same value property, either way our Mortgage will remain at 95%, we will neither help nor hinder their quest to rid themselves of customers they were falling over to get 2 years ago.

Are you saying then , that economicaly it makes more sense to trap people in our position in their homes? surely as a mortgage adviser you can only benefit from people being allowed to move in this situation?

Im sorry, but to me it makes zero sense, they are stuck with us one way or another, so why not at least help to get the house buying process moving again?

poppy10_2

Berger_3 wrote: »

why not at least help to get the house buying process moving again?

As a private business they have no responsibility to 'get the house buying process moving again', especially by handing out more 95% mortgages.

opinions4u

Berger_3 wrote: »

Are you saying then , that economicaly it makes more sense to trap people in our position in their homes? surely as a mortgage adviser you can only benefit from people being allowed to move in this situation?

1) I am not a mortgage adviser.

2) It makes every sense to try to move it's risk profile from 95% lending to 90% lending the current climate.

Im sorry, but to me it makes zero sense, they are stuck with us one way or another, so why not at least help to get the house buying process moving again?

Get the market booming, prices rising and increased demand for mortgages. Excellent idea when wholesale funding has dried up.

What money do you propose they lend to meet the increased demand for mortgages, when the savings market is saturated and new wholesale funds aren't available?

Banks are currently going through an effort to reduce the size of their balance sheets, not increase them.

Trollfever

poppy10 wrote: »

As a private business they have no responsibility to 'get the house buying process moving again', especially by handing out more 95% mortgages.

A Public Limited Company, 43% of which is owned by us, the taxpayers.

:j

Dan_1976

Sorry OP but in 2009 this is how it works, you should no that they treat porting like a new mortgage and it is subject to criteria and change!

Muhasib

Trollfever wrote: »

A Public Limited Company, 43% of which is owned by us, the taxpayers.

:j

while it is under 50% it isn't legally majority owned, the stake is held by UKFI who say in their July 2009 5 year business plan - "we will operate like any other active, engaged shareholder to protect and create value, operating on a commercial basis and at arm's length from Government."

nothing in there about increasing risk or LTV % you'll note

garvbuck

I don't really know why so many people on this forum, like opinions4u, have to treat people with such disdain just for asking questions. If you can't ask questions on this forum, where can you ask them? And you aren't superior for knowing the answers that other people don't.

Anyway, there are mortgage lenders willing to offer above 90% for people in just this situation. It has been widely reported that Nationwide will now lend 95% to existing customers moving house, and allow them to port negative equity on the old property up to 30% of the value of the new one. In effect, this is a 125% mortgage but you can't extend the loan. So it enables existing customers with spotless credit histories to move house for new jobs, or to expand their families, at no extra risk to themselves or the bank.

This is a sensible response to a crazy situation in which lenders and the government seem to think that LTV is a reliable indicator of the safety of the mortgage. My husband and I have a 100% mortgage (now around 107%) and we have never missed a payment. We also have recession-proof jobs. So a like-for-like mortgage would also help us.

By the way, we're also with C&G and we'd also like to move, but we're in the same boat. Hopefully C&G might introduce a negative equity mortgage like Nationwide, and then we'll all be okay.

opinions4u

garvbuck wrote: »

I don't really know why so many people on this forum, like opinions4u, have to treat people with such disdain just for asking questions. If you can't ask questions on this forum, where can you ask them? And you aren't superior for knowing the answers that other people don't.

No disdain intended. Simply explaining why a suggestion isn't already happening or answering a question reasonably asked.

No superiority intended either. But trying to break down questions and answer them point by point should give posters a clearer insight in to why things are as they are.

There really is little to achieve by nodding blindly and agreeing with everything posted - feel free to disagree with my posts, that's fine. But I don't treat other posters with disdain. Feel free to post a specific example - more than prepared to eat humble pie if I've stepped out of line.

Nationwide rely significantly less on wholesale funding, which gives them more flexibility to offer a high priced, narrow range of products above the 90% mark for borrowers with a specific set of cirumstances. I'd hazard a guess that they haven't yet offered 100 mortgages for those circumstances.

dunstonh

It's a shame that when you tell some people the truth and its not what they want to hear they can become quite negative towards those that say it.