Mortgage Porting problem

help007_2

Hi
I have searched other posts but each porting case seems different and generally it looks like besides appealing or changing lender there is nothing you can do

I took a 0.47% tracker 80% LTV Jan 09 for £259k they valued property @£325k and was told it was portable if I needed to move
earn about 55k so think they gave me over 4x income
Accepted offer for £388k want to downsize to pay off some debts
Its a pain because you can't do a mortgage in principal and can only apply once your offer is accepted by then you have instructed solicitors etc
Offer accepted on property for £324k so LTV still 80% and use equity to pay high interest rate credit card debts
They came back saying they would only lend 4x income 220k due to credit score and basically all the equity would go to paying them back 40k (low interest rate) even though would save £950 per month by paying back high interest rate cards and moving (no service charge)

The LVTs are the same so the risk is the same, my income, expenditure a total debt commitments has not changed since I took the mortgage (don't think my credit report has changed they have just changed their scoring)

I have appealed over phone and asked to speak to underwriter will take up 48 hours

Can anyone help and give some advise please?

Is there no authority that can force them to be sensible lenders (if there is no additional risk for them then how can they refuse to allow me to port my existing borrowing)
Is there a way to get around the 4x income (when I can clearly show significant savings I will make)
Should I get my mortgage advisor to send them my points in a letter also?
Has anyone got any tips for what I can say to underwriters?
Most of it is on IO I was going to offer they put more on C&R to show I will pay them back too - do you think this will work?


I think this is going to all fall through because they credit scored me 5x income in jan 09 and now are scoring me 4x even though nothing has changed

any help and advice appreciated

GMS

There is nothing that can be done to 'force' a lender to do anything. Certainly not to force them to be 'sensible lenders' as they will deem themselves to be sensible by declining a high risk (in their eyes) application.

Criteria has been tightened across the board and can change at an hour's notice.

You can try all of the things you mention but with a lender like the Woolwich there is a 'Computer says No' attitude.

Did you have all of the unsecured debts when you were granted 5x income? Woolwich are pretty tight on affordability and want to see fair amount of income left over per month.

dunstonh

Offer accepted on property for £324k so LTV still 80% and use equity to pay high interest rate credit card debts

Is that 80% before the debts were added in or after?

Is there no authority that can force them to be sensible lenders (if there is no additional risk for them then how can they refuse to allow me to port my existing borrowing)

No there isn't thankfully. Portability is always subject to meeting the lending criteria in force at the time. 4x income in this market is still quite high. If there was an authority that was in place to force sensible lending they would probably go back to 3x.

Is there a way to get around the 4x income (when I can clearly show significant savings I will make)

Ask for a payrise, get a second job, get your spouse/partner working.....

Should I get my mortgage advisor to send them my points in a letter also?

If you are paying for a mortgage adviser then yes. If you are just on about a branch clerk then no.

Most of it is on IO I was going to offer they put more on C&R to show I will pay them back too - do you think this will work?

It may help. As it stands you look a little high risk.

I think this is going to all fall through because they credit scored me 5x income in jan 09 and now are scoring me 4x even though nothing has changed

Nothing has changed? You may have become aware of the global recession and credit crunch over the last two years. A return to sensible lending criteria has occurred. 5x income and interest only is high risk and not sensible lending. The move to reduce high risk lending has left many people trapped until they can reduce their borrowing and increase their equity.

help007_2

thanks GMS for the info at least I know to be humble when I speak to them and try to negotiate on switching some to C&R

I didn't mean force per say I just mean with the banks causing the mess and the government making lending so cheap so banks will lend. I wondered if there was an agency that can help people mediate

yes I had same level of the debt when I took the mortgage out and told them about it plus they were listed in writing in the mortgage offer paperwork
@ £259k it must of been 5x although I just gave them my benefits pack and then they never questioned me about affordability

thats what I meant by nothings changed I appreciate the economic climate has but I meant my income, outgoing and debts have not changed and the property I wanted to buy is the same price as they valued the property I am selling when they gave me the mortgage

I get a fair amount of bonuses on top of my 55k so maybe they took these into account more back in Jan 2009 but not now
**does anyone know lending criteria for earnings are guaranteed management bonuses primary or secondary? or variable performance bonuses secondary on can't be included at all?

help007_2

thanks dunstonh

80% LTV is against the property value didn't include the debts

I agree i know people o 30k who have 200k+ mortgages
I happy if they had of lent me 3x and then what ever sensible lending criteria was in place can be ported
I am unhappy they lent me over 4x (not quite 5x) as the rate is too good to give back and go to another lender so they are effectively locking me in my house

I know its not like they said 'computer said No' they gave an option at least

I shouldn't really have to 'Ask for a payrise, get a second job, get your spouse/partner working.....' in order to move to a cheaper property. Fair enough if I wanted to increase my borrowing or was on lower income than when I started

thanks I will try to negotiate on the C&R although I don't think I am high risk because I chose IO as I have my RV in place
It may help. As it stands you look a little high risk.

Yes I am aware of the global recession and credit crunch over the last two years I don't think my lending was ridiculous considering that place was worth a lot more than they valued it and I can afford to pay it.

A lot of my credit card debt came from making home improvements (new kitchen bathroom etc) that have increase the equity work - do you think they will they listen to this?

'The move to reduce high risk lending has left many people trapped until they can reduce their borrowing and increase their equity.'

thanks so they are not just picking on me then? I have the increase in equity about 65k on top of my 80% LTV just stuck with the reduce my borrowing i.e. they are saying I can use the equity to reduce but only to reduce their low interest debt and not my high interest credit cards

If they say no still after appeal what my options?
take it and consolidate cards after - but it might be hard to get consolidation loan
don't take and upset my buyer and seller
any ideas I guess it would help if I had a good plan B

dunstonh

80% LTV is against the property value didn't include the debts

Thats a possible snag as the debts being added in go towards the LTV.

I shouldn't really have to 'Ask for a payrise, get a second job, get your spouse/partner working.....' in order to move to a cheaper property. Fair enough if I wanted to increase my borrowing or was on lower income than when I started

I can see your logic as will others. However, they treat it as a new application and thats where it falls down unless you get a lending official with discretion.

thanks so they are not just picking on me then?

No. Victim of circumstances.

If they say no still after appeal what my options?

Another lender? However, most lenders are not doing interest only any more unless repayment vehicle in place.

TrickyDicky

You may have to consider just staying put, or selling up and moving into rented accomodation, then saving up another deposit. This may be a lesson that putting lots of money on credit cards at high interest is a bad thing. Dont spend what you cannot afford without convoluted house buying/equity releasing schemes.

dimbo61

Have a look on the debt free board to see if you can reduce your spending and I only wish I had your mortgage interest rate on my debts!!

help007_2

just to let you know they agreed it at the appeal stage as I fortunately spoke to an underwriter willing to listen to reason

it helped a lot to know before I spoke to them that you don't have a leg to stand on when it comes to lending decisions even when they make sense - this really helped so thank you for all your advice

to anyone else in such a mess, if the initial decision goes against you, appeal so you can talk to an underwriter directly then calmly!! and using a lot of humility explain how their risk is not increased and by making significant savings your affordability improves so you will be all the more ready when interest rates go up which improves their risk - then pray for luck they use their discretion and not a computer says no attitude

in a way I am glad I went through this and was thrown a life line as I learnt a valuable lesson, stop using credit cards ... a lesson I needed to be taught

hope others find this useful

thanks again !!!

dunstonh

just to let you know they agreed it at the appeal stage as I fortunately spoke to an underwriter willing to listen to reason

Well done on getting through to someone that is able to excercise discretion.

zobunny

im an similar situation and have a morgage for £98 000 and a house worth £127 000, i have £7 000 worth of debts mainly- credit cards. i have found a new house would like to buy for £92 000 so could pay my debts off and pay moving costs etc.. my morgage is which nationwide and is portable so will i also have to re apply? ido you think this a good idea????????????? any advice would be great thanks