Brittania Refusal of extra lending - Appeal available?

hoppy1971

Our situtaion is the following:
- currently we (wife and I ) own a property we are renting out to tenants in North London on a fixed rate 5 year deal, with a 4K redemption fee at the mo.
- We are currently living in Sussex in rented accomodation.
- In April our long term tenants of 2.5 years left property in London and we felt it would be a good time to sell.
- With this in mind I called Brittania to see if
-) we could take a payment holiday, and or revert to a interest only mortgage.
Brittannia said no to both counts. The operator said that if I would find it a struggle to pay the mortgage then they would consider a transfer to a interest only option. I said it would be a struggle (only in order to access the interest only rates) and receieved paperwork within the next few days.

A week later after receiving financial advice we decided against selling the property but keep it and port the mortgage across to a property in West Sussex and keeping the london flat releasing the equity but having it as a buy to let mortgage.

Brittania initially said OK this was possible, however when I called again to reduce the amount another underwriter looked more closely at the conversations I had and as a result refused the extending of further monies and the porting of the mortgage.

the reason....because in my phone conversations I had said that I would struggle to keep up with repayments if the London Property would be untenanted.

I appealled stating that I said this in order to access the Interest only rates because at the time I thought we were going to sell.

They didnt take into consideration the facts that:
we have never missed a mortgage payment,
we have over 45K in savings
We have increased our joint incomes since initially taking out the mortgage with Brittania.
new tenants have been found last month.


Can any one help me what to do next, the FSO cant due to it being a commercial decision and if poossible avoid the ERC.

Thanks

Hoppy

Annisele

hoppy1971 wrote: »

A week later after receiving financial advice we decided against selling the property but keep it and port the mortgage across to a property in West Sussex and keeping the london flat releasing the equity but having it as a buy to let mortgage.

I don't understand what this bit means. If you are "porting" the mortgage from the London flat to another property, that would normally mean that you were entirely repaying the mortgage on the London flat - which wouldn't release any equity.

Are you trying to port the mortgage from the London flat to the Sussex property, and then take out a brand new BTL mortgage on the London flat?

What is your situation now, in terms of: your income, your wife's income, outstanding mortgage on the London flat, value of the London flat, debts other than the mortgage?

What is your situation going to be if everything works out as you want? (I.e. what do you want the mortgage on the London flat to be, what is the purchase price of the Sussex property, and how much do you want to borrow to buy the Sussex property)?

I know I sound all moralist here, and I'm sorry about that, but lying to lenders (for whatever reason) is something that is very likely to come back to bite you in the current climate.

hoppy1971

COLOR=#000000]SEE MY REPLIES[/COLORI don't understand what this bit means. If you are "porting" the mortgage from the London flat to another property, that would normally mean that you were entirely repaying the mortgage on the London flat - which wouldn't release any equity

Are you trying to port the mortgage from the London flat to the Sussex property, and then take out a brand new BTL mortgage on the London flat?YES WE ARE

What is your situation now, in terms of: your income 28K, your wife's income 38K, outstanding mortgage on the London flat 120K, value of the London flat 300K, debts other than the mortgage NONE?

What is your situation going to be if everything works out as you want? (I.e. what do you want the BTL mortgage on the London flat to be 180K, what is the purchase price of the Sussex property 300K, and how much do you want to borrow to buy the Sussex property225k)?

in brief: our objective is to purchase a 300K property in Sussex. We currently have a 15K deposit and an additional 15K for associated costs (stamp duty / solicitors etc). We own a property in London valued at 300K with a 120k Britannia mortgage. We have asked Britannia to port across the 120K mortgage to the West Sussex property. We want to keep the London property but need to raise 300K to buy the West Sussex property. We need to borrow 225k from Britannia and have a 75k deposit. We only have a 15k deposit the additional 60k needs to be raised against London property by releasing the positive equity. We were hoping to take the original 120k Britannia mortgage with us so the London property will be need to be remortgaged onto a BTL mortgage for 180K (120K + 60K).

Hope this helps
I know I sound all moralist here, and I'm sorry about that, but lying to lenders (for whatever reason) is something that is very likely to come back to bite you in the current climate.COLOR=#000000]ALL INFORMATION GIVEN CAN BE PROVED[/COLOR

Annisele

I think your best bet is to take that to a whole-of-market broker and see if they can help you.

You've joint income of £66k, and you're wanting to borrow £225k (3.4x salary) on the Sussex property and £180k (2.7x salary) on the London one - so total borrowing of more than six times salary, and very little in the way of a savings cushion (once you've paid the deposit/stamp duty/etc).

I think you're going to have an uphill struggle to persuade Britannia that you can afford all that - especially as you've already told them that you're worried that you won't be able to cover the payments on the London flat. A broker would be able to put your application in the best possible light, and might be able to sort something out for you.

Thrugelmir

hoppy1971 wrote: »

Brittania initially said OK this was possible, however when I called again to reduce the amount another underwriter looked more closely at the conversations I had and as a result refused the extending of further monies and the porting of the mortgage.

the reason....because in my phone conversations I had said that I would struggle to keep up with repayments if the London Property would be untenanted.

I appealled stating that I said this in order to access the Interest only rates because at the time I thought we were going to sell.

Move on, and put this episode down to experience.

If this is the truth then the situation may well occur again in the future.