My bank wont let me change my loan to a mortgage.

fair84

Hi

I need some advice as I have got myself into a situation. I have previously bought and renovated buy to lets successfully so thought I had the hang of it but with my latest purchase it has all gone wrong :-(

Previously I had a very good mortgage broker and everything was fine with my other properties but with this purchase I used a 'friend' as he had a mortgage broker business and was struggling a bit so I sent the work his way. I had an offer accepted on the house and my friend sorted the mortgage everything was ok, a few weeks before the due completion date he said that the mortgage had fallen through but not to worry there was another company that would do it, this was set up again (still with the same valuation fees etc which I thought was odd) and the date was set up for the money to come through on the completion date everything was in order. A few days before the completion date my advisor phones me and says there is no money coming. I couldn't believe it I had already paid my deposit and some how had to find £40,000 very quickly. I went online and looked at loans with TSB my bank. I looked at 3 the most I could lend was £20,000 and it kept giving me different prices, anyway after a few quotes it blocked me out and said I had to ring an advisor because I put to many requests through, I did and they said they would only lend me £10,000 which I accepted I thought I will worry about the rest later. The following day I went back on to my internet account to see a message, your £20,000 loan is waiting click here! So naturally I did and £20,000 was put in my account instantly it was quite scary! but a blessing at the time, my parents kindly lent me the rest and I bought the house and did it up. I quickly got a tenant which just covered the loans at £550 per month and my plan now was to get a mortgage. I was informed I had to wait 6 months which I did, I have now waited 12 months and it has been such a struggle and I really need to switch to a mortgage to help with my cash flow & to pay my parents back!

I went to TSB which is my bank as another mortgage company turned me down due to my high unsecured lending (£30,000 in loans from TSB) So I thought as TSB are aware of this and I can explain I want the mortgage to repay these loans it so shouldn't be a problem. I was concerned as I have recently started a new job so couldn't prove my income but the advisor told me it wasn't a factor as its a buy to let and the rent covers it. I bought the house for £55,000 and did it up which cost £10,000 the house was valued at £95,000 afterwards and I was only asking for a £60,000 mortgage which would have been about £300pm. The rent I receive is £550pm and I am currently paying £550pm on loans. After the advisor being very optimistic about me getting a mortgage 2, very boring hours later he refused my mortgage. I have checked my credit score there are no late payments, defaults etc the only thing that isn't positive on there is my high unsecured lending which is why I want the mortgage.

Sorry for the very dull tale of woe but thats the full story. Anyway my question is this: Is it fair for Lloyds TSB to keep me locked in to these high interest rate loans which I am struggling with at £550 a month when I have a house without a mortgage on it which I want to secure my lending and make my life easier at £300 a month?

Does anybody have any advice on how I can get around this problem? much appreciated

Eonel

You need to get rid of that unsecured lending by any means - borrow more from parents, or pay it off over time from salary. Once it is off your credit record you stand a better chance of being able to borrow secured.

The good news is that even at unsecured lending rates, you are still breaking even. £550 payment vs £550 rent. You have a little time on your side to sort this out, so don't make any other rash unsecured lending decisions.

It is "fair" of lloyds. You recognise that this situation is your fault. Lloyds are under no obligation to bail you out of your mistakes.

Dave_Ham

Trying to help out a friend and I feel for you on this one..

That said, buy to let lenders hate high unsecured debt as although there is a rationale behind yours, it will not stand up in a lender's eyes.

From the limited information provided, there is pretty much only one lending solution for you here and hopefully you get there before you trash your credit file with searches.

I would suggest you go back to your previous broker and ask very nicely for him/her to sort this mess out for you.

There is likely to be a solution, but worthwhile getting your Experian, Equifax and Call Credit files in advance of speaking with your broker...

All the best

ACG

I used to work for a lender, their perspective on someone with high unsecured debt was that if they were to do the mortgage for you and therefore pay off the unsecured loans. There is nothing stopping you running up that amount of unsecured debt again - and soemone with that amount of debt was more likely to run it up again, than someone without.

I agree with dave, im sure there will be a way around this and it might be worth going back to the tried and tested advisor to see what they can do.