Suprised by how much my current lender was willing to lend.

tomstickland

I had a look on Charcol online and called up London and Country today to see how much I could borrow if I moved home. Charcol brought up very little, and London and Country had a few offers, but nothing amazing.

I called my current lender and went through an agreement in priciple process with them.
They were prepared to port my current mortgage over (£75K originally) and increase it. An amount equal to the original loan amount could be carried over at the current fixed rate and the remainder would be at a slightly higher rate.

Then they told me how much I could borrow.
Bear in mind that in 2006 I had an agreement in priciple for £145K.
They said I could borrow up to £220K.

I was quite surprised by how large an amount they were prepared to lend. Not that I would borrow that much though.

ohit

Interesting.

What lender? What rate/terms?

moochd

We are looking to move to a larger property and have, like yourself, been offered what we think is a crazy amount!

Bought 1st house in 2005, Halifax mortgage promise was £97k, but we took mortgage £87k due to savings.

Had a meeting fortnight ago in-branch, and where told that we could borrow £211k!!! quite a jump...

All I can think of is that they take into consideration payment history and also the fact that both our earnings have increased since then.

Wutang_2

moochd wrote: »

...also the fact that both our earnings have increased since then.

Yes, this would explain a lot!

LOUY_2

The current lender will already have a file on you and will already know your history. This will probably mean they are more comfortable with lending you more money.

Any new lender will have to do check and risk rating, and as they do not know your history as well, it may consider you as an unknown risk (to some extent) and may not be as willing to lend so much.

Also remember, it is cheaper a lender to keep an existing customer (and a profitable one low cost i.e. paying interest charges and on time) than to find a new one.

As borrower, it is always worth checking out our existing lenders and connections. When my mortgage was up last year - before the financial melt down, my lender (which specialised in sub prime mortgages) offered me a new rate which was extremely high. I phoned around and all I was able to find was mortgages which was more than what I was paying. I felt certain that my mortgage cost was going to go up.

I then went to my High Street bank HSBC - who I had been banking with for over 15 years. I had never used my overdraft and never missed a payment. They then offered me the perfect mortgage and very cheap too. Being a variable rate, I am currently paying 1.29% (BOE plus 0.79). I was shocked at what they offered, but very excited and happy. I asked how come they were able to offer me such a good deal (knowing how bad the other offers I had receved). They said it was because I had a very good rating on 'their system'.

TighterThanTwoCoatsOfPain

moochd wrote: »

All I can think of is that they take into consideration payment history and also the fact that both our earnings have increased since then.

pmsl yeah, fancy that making a difference! :rotfl:

It seems to be only those in money issues or negative equity who dont have access to plentiful amounts of credit as far as I am experiancing.

During the "Credit Crunch" :rolleyes: I have had 2 companies throwing Credit cards at me with nice limits on good terms and mortgage companies offering to lend 4.25 x joint earnings (current mortgage is 1.34 x joint earnings).

Unless the company i work for folds (its not impossible) I can honestly say I dont personally know anyone impacted over the last couple of years other than the hit to interest on savings for the golden oldies.