Remortgage Lousy Offer

Hal1957_2

I have 2 yrs 3 mths to go on my existing mortgage, house has £100,000 equity, enquired about a remortgage of £40000 over 10 yrs to do house improvements and pay off credit card with my existing lender and pay edowment shortfall. The offer I got was £5000, always paid my mortgage on time and a good credit history why such a lousy offer.

Senior_Paper_Monitor

I am guessing you mean - there was a £5,000 ERC within the remaining 2yr 3 mth deal period rather than term ?

If so because that's the contract you signed agreed to at the time you took out the mortgage.

Depending upon a whole host of other issues - taking an additional borrowing for 2 yrs deal (which are generally low at moment) so it ends at almost same time as current deal would appear an attractive option - with the two loans running parallel (although not all lenders will do extra borrowing for consolidation).

Secured loan from separate lender over longer peiod also an option (and pay off under Consumer Credit Agreement terms when you remortgage in 2 yrs 3 mnths time).

Take the problem to a broker - should be easy.

maninthestreet

Hal1957 wrote: »

I have 2 yrs 3 mths to go on my existing mortgage, house has £100,000 equity, enquired about a remortgage of £40000 over 10 yrs to do house improvements and pay off credit card with my existing lender and pay edowment shortfall. The offer I got was £5000, always paid my mortgage on time and a good credit history why such a lousy offer.

Lenders don't want to take over existing debt from another lender.
I don't understand the logic of borrowing more money mortgaged on your house to pay-off an endowment shortfall.

Hal1957_2

It was quote from the same lender, thought remortgage was a cheap loan? to pay off edowment shortfall.

deedee71

It might have something to do with the lender's strategy.

I'm with Intelligent Finance which used to be part of Halifax/RBOS and is now part of Lloyds. IF has been rebranded as a savings arm and although the SVR remains low they seem to be actively encouraging mortgagees to move.

When I came to the end of my tracker rate I discovered IF only offer one mortgage product - a 2 year fix at 5% with a £1000 fee, not exactly a market leader lol.

Just a thought, although you don't mention your income, could they purely be looking at that and giving you a low offer??

Peter_L

deedee71 wrote: »

It might have something to do with the lender's strategy.

I'm with Intelligent Finance which used to be part of Halifax/RBOS and is now part of Lloyds. IF has been rebranded as a savings arm and although the SVR remains low they seem to be actively encouraging mortgagees to move.

When I came to the end of my tracker rate I discovered IF only offer one mortgage product - a 2 year fix at 5% with a £1000 fee, not exactly a market leader lol.

Just a thought, although you don't mention your income, could they purely be looking at that and giving you a low offer??

Really Dee Dee ? Wasn't aware that they were wanting to offload their mortgages. They did close their borrowing to new customers at one point but then did a complete u turn. As it happens I managed to port my BOE +0.5% for life of mortgage and got it to reset to 25 years some 6 months ago, no product fee, no ERC and overpay as much as I wanted - maybe I was lucky ???

maninthestreet

Hal1957 wrote: »

It was quote from the same lender, thought remortgage was a cheap loan? to pay off edowment shortfall.

What is this endowment - was it designed to pay off the mortgage for the property you wish to re-mortgage?

kingstreet

Hal1957 wrote: »

I have 2 yrs 3 mths to go on my existing mortgage, house has £100,000 equity, enquired about a remortgage of £40000 over 10 yrs to do house improvements and pay off credit card with my existing lender and pay edowment shortfall. The offer I got was £5000, always paid my mortgage on time and a good credit history why such a lousy offer.

If I read your post correctly, you have approached your existing lender for a further advance or secured loan on top of your current mortgage. The mortgage is to remain as it is unaltered?

For some reason, your extra borrowing request has been turned down and you've been offered only £5k?

Can you tell us the reason for that? Is your income low, or is there something in your credit history/affordability causing a problem?

deedee71

Peter_L wrote: »

Really Dee Dee ? Wasn't aware that they were wanting to offload their mortgages. They did close their borrowing to new customers at one point but then did a complete u turn. As it happens I managed to port my BOE +0.5% for life of mortgage and got it to reset to 25 years some 6 months ago, no product fee, no ERC and overpay as much as I wanted - maybe I was lucky ???

Hi Peter, yes really lucky I would say. I don't remember the lifetime mortgage being on offer when I got mine in 2007. Mine only tracked for a set period and I'm now on the SVR. It's great for the time being on 2.5% but makes for an uncertain future!

I may give them another call, but in February when I had 3 months to go they were most unhelpful.

Thrugelmir

Peter_L wrote: »

Really Dee Dee ? Wasn't aware that they were wanting to offload their mortgages.

Lloyds is under an EU directive to reduce its share of the UK mortgage market following the takeover of HBOS.

The sale of branches (as directed by the EU) will reduce Lloyds mortgage book by around £60 billion or 15% of total lending.

As the sale of the mortgage book looks difficult to say the least a reduction in lending across the whole group may be a current board policy.

Thrugelmir

Hal1957 wrote: »

The offer I got was £5000, always paid my mortgage on time and a good credit history why such a lousy offer.

Purpose of the remortgage monies.