Is lender trying to get me to move off low rate tracker for more expensive deal????

ralphiethedog

I have a low rate tracker with A&L for the rest of the term on my mortgage (£155k). It is portable & I wish to port it to a new property with a new mortgage for an additional £35k. I have 15% deposit.

I have a new mortgage lined up on my existing property which will redeem the A&L mortgage. I am renting out the existing house out which will give me a surplus income of £10k. From day one A&L have agreed in principle to port my existing mortgage and to fund me additional funds. My existing mortgage is £600 per month. I had been offered a new 2 year tracker for the £35k at 4.99%. I had requested interest only payments on the new combined deal which would cut my mortgage payments by half.

A&L took the monies for a valuation. When I rang to check on progress, I was advised my application was turned down because it was not deemed affordable. I appreciate that the rent on my existing property cannot be taken into account until I have six months receipts and so is not currently deemed self financing and the mortgage of £400 must be taken into account in my application for the new mortgage. I have a 0% balance transfer deal on 2 credit cards of £9k where I pay minimal amounts each month and which will be paid off when I redeem my existing mortgage. They have said that they are only prepared to fund me £20k less than my exisitng mortgage.

I have appealed the decision and tried to reason that my proposed mortgage payments will be half my existing payments. A&L state that they have to consider me as a new customer. Staff outside the Mortgage Review department at A&L are baffled. They had also queried where the deposit was coming from which is part equity release and savings. I am awaitng their decision.

I have looked at who else can do 85% LTV deals on my salary, interest only and taking into account my £400 proposed mortgage on my BTL...and there is A&L offering several deals and my deal and even when I increase my monthly loan outgoings to £700, they are still offering the same deal but yet my loan outgoings are only £400 and will be met by the proposed rent on the BTL.

I have heard of a story whereby a lender tried to get a borrower to give up a cheap tracker deal for a more expensive deal on remortgaging but this was in Ireland and I was wondering if anyone else has had similar experiences to mine.

By the way, I am loan security valuer for commercial and resi properties and where I am pleased to see lenders cracking down on crazy lending, I cannot see how commonsense can not prevail here. The proposed mortgage payments are not even 10% of my monthly salary.

Thrugelmir

Why interest only ?

I had requested interest only payments on the new combined deal which would cut my mortgage payments by half.

If

The proposed mortgage payments are not even 10% of my monthly salary

Yet you need to remortgage to clear your credit cards.

I have a 0% balance transfer deal on 2 credit cards of £9k where I pay minimal amounts each month and which will be paid off when I redeem my existing mortgage

Your finances don't seem as stable as you suggest.

getmore4less

Trying to deconstruct the post(why can't people just table the facts)

New property

£155k(£600pm) + £35k(4.99% 2y track) + 15% deposit = £223500 purchase.

request for I/O


Old property

£155 new BTL mortgage no details, might be £400pm?


£9k debt get paid off some how?

That the best I can get from the post

any fees?
no salary

Try a table of the detail that someone can actualy understand without the waffle.

ralphiethedog

The new house is being purchased at £225k. My current house has been valued at £235k.

Why interest only? That is my choice because it gave me flexibility to do some other stuff. The house I am buying is worth over £250k. And it would seem pointless trying to request repayment mortgage if A&L think I cannot afford £330 per month. You will just have to trust me that my finances are solid. The monies to clear my credit cards is coming from another source and the debt was accrued to free up some cash when I had to pay an ex partner to transfer equity of house to my name 2 years ago. I am not remortgaging to pay off credit card debts but to release equity to buy a new house and to rent out my current house as it will be a great investment when savings accounts etc are doing nothing. My income is £50k. Fees are £500.

getmore4less

Table the facts so people can work it out and try to help.


Trying to work out the BTL

£155k @ 400pm I/O is 3% where is this deal coming from people would be interested. (Is this providing the equity for the deposit?)
You say £10k profit as you are 40% tax payer so the rent must be in the order of £1800pm.

If they are not counting rent they will look at total borrowings which is in the order of £350k which is 7* earnings could be more since the deposit is a mystery.

Cannon_Fodder

ralphiethedog wrote: »

You will just have to trust me that my finances are solid.

Its not us who need to trust you. When you wish to borrow someone elses money, they have the right to be picky about who they trust and the criteria you need to meet.

IO is not attractive since the crunch. That may be a red flag to them.

TrickyDicky

ralphiethedog wrote: »

Why interest only? That is my choice because it gave me flexibility to do some other stuff.

What kind of other stuff? stuff that involves not paying back the mortgage?

with IO, how do you expect to pay off the balance in 25 years? sell your house and downsize?

ralphiethedog

Thanks everyone for their help. All is good and I now have my mortgage. Panicking for no reason!