Portable mortgage issue

tslambert1973

Hi,

I'm wondering if any body can offer me any advice.

Myself and partner have a portable mortgage with the halifax. She re-mortgaged her flat and we put it into both our names last July. I understand a portable mortgage means that if we want to sell and buy a new property then as long as the amount is the same we don't pay any exit fee and the percentage stays the same.

Our mortgage is 140K and we require the same amount on the new property we want to buy - all sounds straightforward. Actually no... even though we currently are borrowing 140K, the largest amount they can give us if we start a new mortgage is 116K as that's all they deem we are able to pay, even though we are successfully paying off the current mortgage - make sense? Not to me!

Is this acceptable or legal? Could FSA involvement help us get the amount we need which is what we have with them already anyway.

Perhaps we can go to another lender for the new mortgage however that would incure a 4K exit fee.

Advice gratefully recieved!

T

kingstreet

Portability is the ability to transfer the rate from one mortgage to another when you move house.

In practical terms, you have to approach your lender for a new mortgage on the new property and satisfy their current criteria and status requirements. If you are borrowing less, a partial repayment charge will be likely. If you are borrowing more, the extra money will be on a choice of the lender's current products, with the current rate ported to the existing amount you owe for the remaining time.

It is not a guarantee of a mortgage, merely the opportunity to see out the original offer.

hillcats

Have you brought the LTV into the equation, are they only prepared to lend say 80% of the new property price?

tslambert1973

My partner was the one on the phone to Halifax so I may be missing some relevant info:

Our flat is selling for 237,500. The house we're buying is 215K. Out of the sale we'll have 25% deposit to add to a 140K loan. They'll be 15K or so left over after fees (solicitor, moving, agents) but we really want to keep that by for things.

They were only prepared to give 116K so 54% of the property price. We've found some money in an account that can pay off majority of a credit card and phoned them up about that so it might swing thins in our favour now with the underwriters hopefully.

T

kingstreet

If you're buying at £215k and want a £140k mortgage, that's a deposit of £75k, or 35%?

A deposit of 25% would leave you needing to borrow £161k?

Halifax offers different lending levels based on how you pass the credit score, the term of the mortgage, your incomes, dependents and other credit commitments.

Is is possible one or more of the items is dragging you back to the lower borrowing of a "C" pass as existing borrowers normally get an "A" if everything is in order?

Late payments on commitments or mortgage?

tslambert1973

Oh we have 35% deposit in that case not 25%.

They told my partner that the decision is not made on credit score but on ability to pay which is the problem as we have a baby and her part-time work is all self-employed and only have 1 years worth of accounts. These were the same circumstances last year when they gave us a mortgage however. I guess my arguement is we have 140K mortgage now and we're paying it fine so whats the problem.

I had a really good credit score last year and I certainly have not defaulted on anything and even cleared a credit card to zero balance. I have two cards on zero and one with 3k on it which I can pay off 2k today if I go to bank to withdraw from from savings acc. I wonder if having two cards on zero is still an issue as the potential to spend on them is still there. Maybe I should cancel them both. One is with Halifax and I transfered onto a 0% barclaycard. May be the don't like that I'm not in debt to them?

GemBlueTopaz1984

My guess is that the issue is income multiples then, they will only lend a certain mulitple of your wage and if you wife has no proof of income then it might not qualify to be included. What is your salary. My guess would be that you alone are on less then 30K which is wherethe 116K has come from 4 x 29k. Although you say you are comforably affording the higher mortgage payments banks and lenders have to be seen to be lending responsibly in this day and age. They may have in the past given a higher multiple to allow you to get the mortgage you currently have or your wifes salary might have been taken into account at that time.

Gem

tslambert1973

Thanks for replies and advice.

It looks like we're going to get a mortgage as long as I pay off a credit card, and that my partner for the third time this week goes into a branch and has even more id faxed to the underwriters - we have a joint mortgage with halifax already but they cant find her on the system - weird!

T