Underwriters!

butwick

Hello, we have £74k left on our mortgage with Santander with 11 years remaining of our term (repayment). Our house value is approx £214k. We have a flexi mortgage with Santander & have been told we are on their best deal currently at 0.99%.

We are looking to extend our property as this is our "forever" home and we want to make improvements as we have outgrown it as a family but can't afford to move. Sadly though we also have quite large debts. We recently broached Santander to see if we could borrow £50k to consolidate our debts and carry out the home improvements. We already have funds of £22k readily available that we can "draw down" so in essence we were looking to borrow an additional £28k.

When we went to see about the additional advance the mortgage advisor didn't fill us with confidence as he kept quoting incorrect figures to us. We had been on their mortgage calculators and worked out if we extended our term out by a few years we could clear our debts and carry out the home improvements, and be significantly financially better off each month as we are currently caught in the trap of paying off only the minimum payment on our credit cards due to the high interest rates.

However, my husband is self employed and as soon as his details were entered the advisor said that it needed to be sent to the underwriters, even though he has been in business over 10 years and we were able to produce his most recent 3 years worth of accounts.

Anyway, long story short, the underwriters have turned down our application because of our debt situation. What they also took into account which we failed to, was that my husband has a small business loan which we hadn't factored in as it's for the business and not personal debt, however, as he is a sole trader and not a ltd company this goes against his liabilities. We looked at the reports with our outstanding debts and the credit file is correct but when we looked into this deeper for each of our individual credit files the underwriters had added together our debts twice, so for example where we have a car loan jointly of £8k this has been reflected as us owing £16k. They have done this for each of our joints debts, including the outstanding balance of our mortgage so instead of showing £74k as a joint liability it is showing £148k and so on. We wrote back to Santander explaining that surely this process couldn't be right? When we saw the mortgage advisor about this all he kept telling us was that 6 months ago it wouldn't have been a problem for us to have this money but now they have changed their lending criteria.

Anyway, we wrote back as we were also told that they would lend up to 75% LTV and we've worked out that we currently have approx £140k worth of equity in the house so our LTV is approx 37% and if we borrowed £50k it would still only be around 57%. If we were also able to complete our home improvements this would add further value to the property. We've calculated also that by extending our term with the additional borrowing at current rates we would only have to pay an additional £55 per month for our mortgage. However of course we realise we need to budget for interest going up and additional life insurance etc but this is still far cheaper than the exorbitent credit card charges. We know why we had got into debt in the past and we have taken measures to address this but the situation with interest rates have perpetuated our situation and we are very keen to clear this asap.

I should point out that we have NEVER defaulted on our mortgage or on any of our outstanding debts and they are paid on time every month. We are however in a situation where because of high interest we are now only able to afford the minimum repayments and we recognise this is a dangerous situation so want to put a stop to this once and for all.

Anyway, we wrote to Santander nearly 5 weeks ago now and have still heard anything (we did have a phone call from our branch advisor who has resubmitted our application to the underwriters but we've heard nothing since). What do you think our chances are? Is there anything else we can do to improve our situation? We are happy with the mortgage deal we have with Santander but we just need this money. If we are turned down again is there any thing else we can do? Should we go to a mortgage broker to see if they can help us and our predicament?

Sorry for the long message but I'm having sleepless nights over this and really don't know which way to turn now for the best.
Thank you.

GMS

Santander have rules on debt consolidation where they will restrict amounts and for home improvements they want estimates from surveyors of after works valuation.

Speaking to a broker would possibly get you a deal but that would mean losing the rate you have at present which is not available for a new lender.

I would try to speak to an underwriting manager at Santander and point out the case to them.

butwick

Thanks for the advice, how would I find out how to contact the underwriters manager as we'd had left it with the branch. Should we follow up with the branch in the first instance - we've heard nothing from them, how long does it normally take to make a decision.
Do you think on the basis of the info' we've provided here they would view our case sympathetically?
Thanks for any other advice that can be offered.

butwick

Thanks for the advice, how would I find out how to contact the underwriters manager as we'd had left it with the branch. Should we follow up with the branch in the first instance - we've heard nothing from them, how long does it normally take to make a decision.
Do you think on the basis of the info' we've provided here they would view our case sympathetically? We saw the mortgage advisor in branch on 11th April then again on the 21st when he told us of the underwriters information. We then submitted our letter to branch on the 28th April. We had a phone call from the branch on 16th May to advise it had gone back to underwriters but heard nothing since, is this reasonable timeframe, I don't want to be pushy for fear of jeopordising anything but equally if the answer is still no I want to know why and what alternative options if any are open to us. If we don't get anywhere with Santander and we recognise we are on a great rate, can anyone think of any alternative solutions to enable us to borrow the additional money and clear our debts in the process?
Thanks for any other advice that can be offered.

butwick

STILL NOTHING FROM SANTANDER.......what should we do next? PLEASE....ANYONE???

GMS

Speak to the mortgage centre and ask for a manager. The branch will not be able to make any decisions.

Try this number
0800 092 3881

Apologies if it is not the correct one but they should be able to direct you to the right department ifd not

If you get no joy from them you may need to consider borrowing elsewhere. Speak to a broker to see if you can do anything.

Muscle750

We borrowed another £20k for a extension from Santander, which i originally had budgeted for and was offered £25k yet we decided to borrow £20k as the other £5k may of been unecessaryly spent. Anyway the extension went over budget and when i went back to Santander to ask if the original offer was still open they slamed the door in my face including a driveby viewing fromn a underwriter whom i actually saw outside making notes the house is worth £200k and we owe them now £130k on a fixed 5 years which is ending in Nov this year I can quite easily see us going elsewhere we were originally wiith A and L whom obviously sold out cant say im over impressed with the Spanish lot by a long way

I_know_my_ABC_and_my_CMYK

butwick wrote: »

STILL NOTHING FROM SANTANDER.......what should we do next? PLEASE....ANYONE???

This is a personnal opinion not professional.

I went to LloydsTsb about 7 years ago now as they called me in for a review and said they could beat my mortgage and I would be able to pay off all my debts and have more money left at the end of the month.

Only problem was it had to go to the underwriters.

After waiting approx 6 weeks with no answer I started to chase it up and I was promised calls back on a regular basis from the Lady dealing with it.

I just managed to save my house from being repossesed I came very close to bankruptcy.

I gave up with LloydsTSB and went elsewhere,

12 months later I had a phone call from LTSB saying that as they couldn't help me last year they were now in a position to do so. I basically said thank you for telling me it was a no go even though you are 12 months too late. I lost it to be honest, not the wisest thing to do.

If you haven't heard from the bank and bare in mind I was told an answer would be with me in 24 hours, don't hang about waiting for the bank keep looking elsewhere and keep your options open.

butwick

hi all thanks very much for all the opinions and advice. We are going to give one last push with Santander underwriters as we are on such a good rate with them. Otherwise, think we will go to a broker to look to change. Our concern though in doing this is that as Santander has already looked at our credit file recently, by going to another lender in a short space of time would that then impact on our credit file negatively again?
We were also thinking about drawing down the £22k of funds that we do have available from Santander to clear some of our debts and then approach another mortgage company for a remortgage and to borrow the additional funds needed for the home improvements as this would then demonstrate that we had less liabilities and perhaps make it look like we are in a better position than currently - what do people think of this idea?
One things for sure, if the underwriters say no again, I want answers from them as to why given our income, excellent LTV and affordability eg, by clearing our debts we would be financially better off than we are now. Would they explain all these things to us if we request a response in writing - we want to make sure if we approach someone else we know what we are dealing and what hurdles we'll be up against.
Thanks again!

holly_hobby

Hi there,

I would suggest that the underwriters may be uncomfortable with self employed status and the amount of other credit you have access to - despite the fact that you are paying each month etc - they do have to factor this type of exposure when looking at rolling debts i.e credit cards, flexi loans etc ... For example - although you are going to repay your os ccad debts on drawdown - there is nothing stopping you building them back again after completion - thereby (in addition with the extra borrowing) putting your finances under strain (depending upon your income) - and possibly (they may be considering) this putting pressure on you paying your mge.

So .. if the reason for decline is revealled as being due to the amout of credit available to you, have you thought about cancelling your ccards, or at least reducing the number - to steady the nerves of Santander, and making your financial circs more attractive to them ?

I do take on board that you have alot of equity in your property, but from a lenders point of view, they don't want to expose themselves in the first place, and certainly don't go into lending with the attitude "oh well if it goes pear shaped, we can foreclose and get access to all that lovely equity" .. the role of the UW is to minmise the banks expose in the first place, so such actions (on balance) are not reqd.

My advice would be to speak to the underwriters if you can, they are notoriously shy, and although on occassion will speak to a broker/adviser, they like to hide in the background somewhat (for obvious reasons if they turn someone down !!)

I would make an appointment with the branch adviser, take all your bits with you, and get him to ring the underwriters whilst you are there .... then he can argue your case, and you are there to prompt or correct when necessary .... you may even get to speak the UW directly .. if you're lucky !!

Hope this help ...

Holly

butwick

Thanks again for all advice. Holly yes I'd never thought of it in that way before but it does make perfect sense. Is it possible to close down cards whilst still having an outstanding balance on them? I would be prepared to do this so as to show we then don't have access to the stupid credit limits available on credit cards but at present we are still trying to pay off the debts. We would only be able to pay off the debts if the bank loaned us the money, until then we have to keep continuing with monthly payments, it's a catch 22 situation.
I know my ABC.... thanks also for your advice, just out of interest how did you resolve your situation after having no success with Lloyds? One of the things the advisor kept saying to us was that they had changed their lending criteria and that if we had applied 6 months ago, it wouldn't have been a problem at all, but clearly now it is - so frustrating!!