Portable morgages - why the questions!?

Funky01

Hi,

I have been on this board recently regarding a new mortgage on a property with bad circumstances - i.e. both myself and my partner were unfortunately made redundant. He now has a new and well paid job, and I am setting up my own business. Not great people for a new mortgage as one not really working (they dont count self employed for 2 years), and one only been in the job for 3 weeks. So, I understand that. Plus, we have debts aswell. Some of you may have read my previous post.

ANyway, due to all of the above, we decided to be sensible and stay within our means. Our current mortgage is apparently portable, so we have sold our house and put an offer in on another house for £6k less. Great! The £6k will also then hopefully pay a good chunk of the usual house moving fees etc. And the loan will be a loan to value of 60% - not bad really! All sounding hunky dory so far.

However, having just had a long conversation with my mortgage provider, I am more than a little confused. He all but practically went through an entire application, despite the amount of times I asked why, as I thought the mortgage could simply be moved! I understand them needing to know about the new house and all about it being subject to valuations etc etc, but why was it practically a new application? Even using their usual "new applicant" blurb, like advising on the best mortgage etc.

What we need is not rocket science - we have a mortgage, which despite the way things may look to the eye on paper, we pay easily every month and have never deferred on. We want to buy a house for less than we're selling ours for. We have funds to then also pay the valuations etc. We dont want any extra borrowings and dont want a diffferent mortgage - just everything the same, but on a new address! So, why oh why, has he now gone off to talk to the underwriter and so cant get back to me with a "decision" until tomorrow???? Tell me, what is the point of calling a mortgage "portable" if this is how it works? I'd say "not so portable"!!!!

Any ideas?? I'm really upset and worried! The estate agent who we're buying the new house through obviously wants mortage proof, but my mortgage peeps have said they havent got anything to send until it's all agreed and that they need to speak to the underwriter, then send forms out, then recheck before we reach that stage!! Is there anything I can say or do to make this less frustrating? We really need to move asap for my husbands job, and short of a miracle, cannot become "the perfect applicants". Portable is supposed to be easy in my book!

Help???!!!!

Many Thanks,

regularsaver1

The product/rate is the part that is portable , not the actual mortgage- they don't simply change the address on mortgage - there is more to it than that

when you move house you need to go through new underwriting - probabaly not as much underwriting as you are existing mortgage customers - and also like you say, the lender would want to do a valuation on the property too

Portability is easier when you transfer the same amount, in your case its lower ( is there a penalty on the £6k?)

AndrewSmith

The mortgage provider has no obligation to offer the mortgage on another property. Portability of a mortgage 'rate' is always subject to, and at the descretion of the underwriters, along with the new property being suitable security for a mortgage subject to valuation.

They always reserve the right to carry out any referencing and checks that they see fit, and may decline your new mortgage application without having to give any explanation. After all, they are 'lending' you money.
They dont 'have' to offer you anything.

Portability simply means that you have the option within an incentive period to take a new mortgage of the same amount as you currently owe on a new property, on the remaining terms of your current mortgage. If you take a mortgage of less, you may be liable to a penalty as per the terms of the incentive rate. Any additional borrowing over the current amount must be on a rate selected from one of the lender's current product range.

Every new mortgage application (and yours is considered a new mortgage) is subject to approval and underwriting.

Not what you want to hear possibly but dont shoot the messenger, I am simply telling it as it is.

Hope this helps

Andy

MortgageMamma

Dependant upon your mortgage rate and early repayment charges, it might be an idea to have a look whats available to you through a whole of market broker. If, or once your current lender comes up with a portability offer it could be compared to taking a new mortgage out, and dependant upon the difference in costs, you may well choose that a new mortgage is a better option.

Funky01

Hi everyone,

Thanks for all your replies. You're right - not really what I wanted to hear, but at least I know the facts now, even though I dont like them! :mad:

I think I just cant get my head round the fact that if we werent moving house, we would still be paying the mortgage on the current property anyway. As long as repayments are kept up, then they wouldn't come and take the mortgage off us - at least, that's what I assume! As far as I am aware, it;s only at risk if you fail to make payments. So, that's why I'm frustrated really, as all I want is a new address. If it wasnt for the new address, they wouldnt have an issue with us. Does that make sense?

So much for loyalty. Oh well. Will see what they say tomorrow. Notmuch else I can do now.

Oh, forgot to say - no early repayment, no redemption penalties or anything like that. Just simple really - or at least that.s what I hoped.

Thanks again.

MortgageMamma

If its so straightfoward and simple with no early repayment charges you shoud have a broker looking at alternative and potentially more money savvy options. You have nothing to lose and everything to gain. turn this situation from a hassle to your complete advantage. Dont worry about the extra timescales a good whole of market broker can recommend and apply for a mortgage dealon your behalf the same day

GL & HTH

Funky01

I thought it might take a while? If that;s not the case, then maybe I should. I did have one mortgage broker contact me with an option, but I was concerned that maybe the rate wouldnt be very good and I feelt a bit too overwhelmed with so many things at the moment, that a new mortgage sounded too complicated - well, to me anyway!

I guess I should see what my (or rather, our!) current lender says in the morning and then maybe check out some other options if they dont make me happy!

At the end of the day - it's an offset mortgage with no early repayment penalities and on a rate of 5% I think. We want to use equity to fund the rest of the hosue purchase and so the loan to value would be 60% which I believe is very good. If we could get another mortgage that's just as good, or better then I'd certainly look. Just concerned about a new lender with our situation - only one of us with a job (a very new job!), and then the debts aswell. Why isnt it as simple as knowing that you have never deferred is beyond me!

Thanks again.