Nationwide won't allow us to port our portable mortgage!

The_Joneses

Hi,

I have a problem that I hope you may be able to offer yourhelp with. If so, I would be very grateful as this situation is now causing my wife and I a considerable amount of stress.

In November 2004 we bought a small property as a step ontothe property ladder.

We took a mortgage on the property with Nationwide. One of the important points of this mortgage was that it was portable, and therefore suited our plan to move house again in the future once we had become parents. This would save us further mortgage arrangement fees and the mortgage also offered us the ability to over pay and to take payment holidays, so it seemed that it would help us cope with life’s ups and downs.

Now we have a growing Son and need a bit more space. However, our property is worth approx. £20k less than we had paid. We did some research and found that we can quite quickly and easily find a tenant to rent our property.

We could meet the requirements for an interest only buy to let mortgage on our current home, and move our current mortgage with us to our new home, or so we thought.

We proceeded to find a 3 bed semi that we liked, so we contacted Nationwide who gave us an Agreement in Principle to allow us to continue. We put in an offer on the house. The offer was accepted and then the sellers also had an offer accepted on a property they wanted to move to.

We spoke to an independent financial advisor who confirmed to us that our plans are feasible and that we would have no problem with the buy to let mortgage. The IFA told us we would need to approach Nationwide ourselves, regarding our current mortgage and the extra that we would need toborrow for our new home.

We contacted Nationwide and were told that we can port our mortgage to the new home, and borrow the extra we would need. We then told them that we would be renting out our current home, to which they said that in that case they would not allow us to port our current mortgage.

When we asked why we could not port our mortgage if we were not selling our current home, we were told that “it is just our rules – we will do everything we can to get you off your current mortgage”

I find it very frustrating that Nationwide not only changethe rules, rules that were certainly not made clear to us when we originally took the mortgage, nor are these rules stated in our original mortgage offer or literature from Nationwide. But more frustrating is that they will openly admit to us during a meeting that there is only one reason that they will not allow it and that is to force us off a mortgage that they sold to us as being a mortgage for life, that we can move with us when our circumstances change and move house in the future.

That is exactly the stage we are at but due to the current housing situation and economic climate, we are now forced into a position that we don’t want to be in and feel we have no real alternative other than to become ‘accidental landlords’.

For this we are being penalised by Nationwide, which makes a bad situation worse for us.

If we are not allowed to port our mortgage then we will be forced into staying in our current home. This will have an impact on not only us, but will also impact up and down the chain that has formed.

The tenants we have lined up, have been round several times and are very excited to be moving from their flat to a house and so will be bitterly disappointed, and the couple we are buying from will be hugely let down by us, and will have to let down the people they are buying from based on the sale of their property to us. I have no idea how far this chain stretches but I know it will impact on many people. All so that Nationwide can force us off our current mortgage deal, so that they can charge us a higher interest rate and new arrangement fees.

This whole chain is now very much in progress and we really need to tell everyone involved as soon as possible if we can’t continue with the new house purchase. We would very much like to but Nationwide are preventing us from doing so.

Is there anything we can do? We are quite desperate to find a solution now. Are Nationwide within their rights to prevent us porting out mortgage?

Thanks for taking the time to read this, and if you could offer any advice it would be greatly appreciated.

Many thanks,
The Joneses

_Andy_

Unfortunately porting is never guaranteed so it's down to the lender's discretion.

The_Joneses

Thanks for your quick reply.

Our original mortgage offer from 2004 makes no mention of is being at the lenders discretion.

In fact quite the opposite, it makes it very clear that it is Portable.

GMS

It is portable subject to meeting lender criteria at the time of application. Porting involves a new application.

Otherwise you could take a mortgage in 2004. Run up debts, obtain defaults, CCJ's and go bankrupt in the interim then expect to move the mortgage as an undischarged bankrupt.

Extreme example but an illustration of why criteria needs to be met.

Thrugelmir

The_Joneses wrote: »

In fact quite the opposite, it makes it very clear that it is Portable.

With a large "subject to" stamped across it.

Porting is at lenders discretion. As is for all intents and purposes a new mortgage application. So is subject to current underwriting criteria. No lender could pre-empt every circumstance that could arise over the term of a 25 year mortgage.

You say you bought in 2004. So even though your property has decreased in value by £20k. You should have made sizable inroads into reducing the mortgage debt. Was your mortgage interest only?

opinions4u

The_Joneses wrote: »

Our original mortgage offer from 2004 makes no mention of is being at the lenders discretion.

Does it say anywhere "We absolutely guarantee you a mortgage when you move house" or "We will lend you another chunk of money on a new property even if it doubles your debt and helps to support your new business as a landlord"?

becominganobsessivesaver

We have a Woolwich portable mortgage from 2006 on a low rate that we didn't particularly want to lose. Before I started the house buying/selling process we checked the terms of portability, additional lending etc, it just seemed common sense. It would have been great to keep and rent out our current property, but at the end of the day we have gone with selling our house and taking a hit and buying a house where they are also taking a hit.

I imagine there are some lucky people who gain always, but one thing I have learnt in the last couple of months is that this property game is about compromise. If a higher mortgage rate would be a stretch what would you do if the boiler broke, the tenants didn't pay etc. If you're not in negative equity I'd just cut your losses and sell (which is exactly what we've done)

kingstreet

This is what a Nationwide KFI says about portability back in 2007;-

What happens if you move house?

If you move house and the lender is able to offer you a new loan, you can keep this mortgage product and you will not have to pay an early repayment charge if you transfer the balance and the terms of this product to the new loan for the remainder of the Benefit Period.

This product may not be available for any additional borrowing above the balance transferred when completing your new mortgage. This does not guarantee acceptance of any future loan application.

Was it different in 2004?

kingstreet

Found another. This time from 2005;-

What happens if you move house? If you move house and the lender is able to offer you a new loan, you can keep this mortgage product and you will not have to pay an early repayment charge if you transfer the balance and the terms of this product to the new loan for the remainder of the Benefit Period.

This product may not be available for any additional borrowing above the balance transferred when completing your new mortgage. This does not guarantee acceptance of any future loan application.

Dave_Ham

Its still a bit early for me, but am I reading this incorrectly?

OP - have you been declined because of affordability or credit score, or have you been declined because they will not allow you to port a product when you are not selling the home you currently live in?

I think it reads the latter and have not seen or done a Nationwide port for a long while, but if you remortgage to the buy to let first - is there not a time limit (3 months maybe?) when it could then be transferred to the new property??

Question is aimed at other brokers really?

dunstonh

Our original mortgage offer from 2004 makes no mention of is being at the lenders discretion.

They are always on the basis of you meeting lending criteria, whatever that is or has changed to, at the time.

I suggest you read the contract again as it does not guarantee portability. It will use words like "may", "if", "subject to" or variations of such.