mortgage application disclosure

Simon_gloster

cwcw wrote: »

That depends. I'm sure legislation could be put in place. Effectively a reduced mortgage on a new place could be treated as the same mortgage rather than a new application.

But it's not mine/yours money or regulators money to play with.

If I don't want to lend someone £20, I won't lend them £20. End of.

In this case of a porting application on a reduced amount, money is still lent therefore even this type of app should be scrutinised just as much as any other application.

potatoefeet66

cwcw wrote: »

OP - I've read through this thread but I have to admit I'm struggling to understand some of the basics. Please could you complete the following, as at the time of the application in 2009:

Proposed house sale price:
Proposed new purchase price:
Remaining mortgage balance to port:
Additional lending required, if any:

Please copy/ paste and complete, rather than writing out in sentences.

proposed sale 300k
new purchase 210-230k
mortgage to port 56-78k
none

potatoefeet66

GMS wrote: »

KFI issued 2 days before the application submitted is not unusual. KFI can be done there and then with the application sent to underwriters. 48 hours seems a reasonable timescale.

not when i wasn't even in branch how can an application be declined before its assessed by underwriter.this is not about whether or not kfi can be handed out but rather the fact that the application did not take place as stated by advisor. any KFi provided would be given on the date of application mine says 3rd but it is recorded on main frame log for 5th.

cwcw

Simon_gloster wrote: »

But it's not mine/yours money or regulators money to play with.

If I don't want to lend someone £20, I won't lend them £20. End of.

In this case of a porting application on a reduced amount, money is still lent therefore even this type of app should be scrutinised just as much as any other application.

If I don't want to lend someone £20, I won't lend them £20 either. However, if I had already lent them £50 which they were paying me back, and wanted to repay the £50 and borrow £20 instead, everything else being on the same terms, why would I refuse? If I refused on the basis of thinking they'd not repay the £20, what does that say about my faith in their ability to pay the existing £50?!

I know the mortgage company treats a ported application as a new one currently, but when the outcome of the port is a net reduction in lending, and all other terms (rate, loan period, etc) remain equal, I don't think they should be able to refuse. Anyone would think they WANTED the customer to default.

potatoefeet66

Simon_gloster wrote: »

I see where you are coming from...in a way.

Try to keep the tin on your tin of baked beans as letting a self contained studio on someones security/land can open a can of vindaloo strength curried beans!!!, especially without their consent.

To put your mind at rest I'll give you a scenario which probably happens 000's of times a day across the UK.

£150,000 property.
£130,000 mortgage 5 years ago.
single man no kids on £30,000 per annum. A doable and nice application.

5 years later.

Property worth £150,000
Mortgage £115,000
single man no kids on £14,000 per annum due to redundancy etc.

Wants to downsize to a £100,000 property and borrow £84,000.

Their existing lender and no-one else will entertain them on those figures as, even though they may be able to afford the mortgage now, it was agreed on terms 5 years ago.

Should that mortgage be agreed and that person falls into arrears as they are good existing payers, the lender would be hung, drawn and 1/4ed for a mortgage that was deemed unaffordable.

If you have been ill-informed at some stage then redress is a possibility, but the mortgage, should you fit remotely the above scenanrio is never going to happen.

the annexe is still part of property and tenant does not have exclusive rights to its use therefore they are classed as lodgers sorry should have clarified that.

potatoefeet66

cwcw wrote: »

If I don't want to lend someone £20, I won't lend them £20 either. However, if I had already lent them £50 which they were paying me back, and wanted to repay the £50 and borrow £20 instead, everything else being on the same terms, why would I refuse? If I refused on the basis of thinking they'd not repay the £20, what does that say about my faith in their ability to pay the existing £50?!

I know the mortgage company treats a ported application as a new one currently, but when the outcome of the port is a net reduction in lending, and all other terms (rate, loan period, etc) remain equal, I don't think they should be able to refuse. Anyone would think they WANTED the customer to default.

thank you thats basically my argument you have hit nail on head .

cwcw

potatoefeet66 wrote: »

thank you thats basically my argument you have hit nail on head .

Sadly that is how it should work, rather than how it does work.

GMS

potatoefeet66 wrote: »

thank you thats basically my argument you have hit nail on head .

The criteria is clear. Meet current lending criteria or get declined. As mad as it sounds that they would rather you had a higher mortgage it is the way it is.

Imagine the headlines if they allowed somebody to port to a lesser mortgage with credit cards they didn't have previously, loans they didn't have, CCJ's and defaults, no income etc. 'Irresponsible Banks' etc, plus any number of ambulance chasing claims companies looking for compensation.

I am not suggesting this is the OP situation but it serves to highlight why a mortgage cannot simply be moved without checks.

Simon_gloster

Your not seeing the bigger picture. Its all about Point of Sale and responsibilty at that time, not what happened 8 years and up to date payment history.

Should the op have adverse credit and decide to downsize, clear credit reduce ltv then an underwriter would probably consider it should it pass affordability rules.

Affordability is king here.

If they did default then its not the lenders fault it is!!!! Come on this is silly.

cwcw

GMS wrote: »

The criteria is clear. Meet current lending criteria or get declined. As mad as it sounds that they would rather you had a higher mortgage it is the way it is.

Imagine the headlines if they allowed somebody to port to a lesser mortgage with credit cards they didn't have previously, loans they didn't have, CCJ's and defaults, no income etc. 'Irresponsible Banks' etc, plus any number of ambulance chasing claims companies looking for compensation.

I am not suggesting this is the OP situation but it serves to highlight why a mortgage cannot simply be moved without checks.

There should be no such headlines. Legislation should force banks into allowing people to reduce their mortgage rather than hold them prisoners. If people want to do the sensible thing and reduce their debt when they're in trouble, they shouldn't be stopped. The bank wins because the "new" loan is more repayable. The customer wins because the "new" loan is more repayable. Everyone is a winner.

If I were a cynic I would think banks would not want to do this because the current method of treating a port as a new application gives them a get out of jail free card, so they can trap a customer on a high mortgage, probably with £££ in their eyes hoping for the repossession and getting the risky sub prime loan off their books. That may be preferable to having a sub prime borrower with a lower debt and more chance of repaying it.