Remortgaging but classed as high risk despire having no problems since '93!!

j9faulk

Hi Just got off the phone with Norwich & Peterborough Building Society and am completely astounded. Apparently having never missed paying a mortgage payment since 1993 we are high risk, not sure how that works? The basic scenario I have him were, income OH £24,203/annum, me £8135/annum plus child benefit (taken in to account by N&P) of £134.80/mth and £90.00 Tax credit (not taken in to account). Our property is worth in excess of £225K and the mortgage we are after is £113K (50% ish). Outgoings we have a 0% apr loan which is £39.38/mth with a balance of £354.51 (9mths remaining), a Barclycard Credit card with £419 on it which we were going to pay off and a Tesco credit card which we clear monthly.

We are currently paying £695/mth to Santander as we are just coming out of a fixed rate mortgage which was on 5.74% for 5 years and the £113k was on a part repayment, part interest only. We wanted to put it all on repayment which at the 5 year fixed at 2.74% was going to only increase our monthly repayments to £725/mth. We also have a flat which is on a buy to let mortgage and has a balance of £79K and is worth £125k. We pay £170/mth interest only and receive an income after agents fees of £591/mth. Taking all that in to consideration N&P were prepared to lend us ????? £68K!!!!

Apparently due to our outgoings and the fact we have two children makes us high risk and despite the fact we have heaps of equity they would not want to see us out on the streets if they had to repossess our house. Very big of them I thought considering the fact that they are forcing us to stay with the mortgage lender we are currently with on a higher interest rate and thereby have to spend more per month on the mortgage. I know that this is not a one off and have heard many stories now of how tough the lending criteria is and people not being able to get the mortgage value that they have been paying for years.

Since when did computers overtake common sense and human ability to see when a person is a good risk? If anyone has any advise on who the best lenders are that are doing good rates I would appreciate it save me having to be rejected by lenders who would not lend to me in a million years! Or if you know how we could make ourselves a better risk that would be great too. Thank you for any help you super people can give.:beer:

somethingcorporate

Quite long post, you'd benefit from adding paragraphs as it will mean more people will read.

Basically, as you have found some lenders won't like your circumstances. Your best bet is to go and find a good broker who can do the legwork for you and stop you wasting applications with institutions that will not be most favorable for your situation.

I do think you'd find a lender to entertain your situation.

ACG

Paragraphs are your friend!

Firstly, theyre not FORCING you to pay a higher amount - you can go to other lenders, sell up or just stop paying. If they held a gun to your head then you could maybe say theyre forcing you... i will get that oscar over to you shortly!

To be honest, your incomes wouldnt give you a massive amount over what your mortgage is even without the debts - 50% equity or not, you still have to pass affordability.

You also have 2 dependents which is not going to help.

As far as N&P go, im not sure what their view is on having a BTL property, im presuming it is on a BTL or CTL mortgage? If your not declaring the rent then theyre not going to take that as income, even if you are they still might not accept it.

I would imagine this comes down to their view on the second property as the other debts are not excessive by any means.

But thats their decision on how to underwrite the applications, if theyre not going to accept it your only other option is to find another lender.

j9faulk

Added some paragraphs in to break up the text, hope that helps with working out the problem. I am glad you appreciate my acting skills and awarded me an oscar ACG, but in fact that it is what this and any other mortgage companies that do the same thing is doing, preventing people from being able to move their mortgage, I'm sorry if you feel I am being unfair and over reacting.

The facts speak for themselves we have never missed any mortgage repayments since 1993 and are financially in a more stable position now than we were six years ago when, somehow, we managed to increase the mortgage up to higher than the £113K we are requesting. We have a higher income and more equity in the propery so where is the risk?

Maybe I am being thick but I can't see it and I pity any poor first time buyers out there who are trying to get a mortgage because they are going to find it very difficult if this criteria is one that is being followed by most lenders. At the end of the day we are a normal family two adults, two kids and an average income. I can try a financial adviser but some of them are not able to offer as good a deal as I could get by going direct (they could match the deals that I had seen but could not get free solicitors fees or survey) if you know the ones that have the most relaxed lending criterias I would appreciate it if you could let me know. Thank you for taking the time to reply. :beer:

ACG

Theyre not preventing you moving your mortgage, theyre preventing you taking more out than you can afford - according to their affordability model not yours. Effectively theyre stopping you coming to them.

Generally speaking, the lower the rate the stricter the criteria - as they only want the best of the best which is why they can afford to offer lower rates.

The thing you seem to not realise is that they are lending other peoples money out, theyre being cautious with it. If you dont like it, move on and find another lender.

If you cant find a lender who will accept you instruct a broker - it might cost you more than doing it yourself, but it may cost you less than than the deal your on at the moment.

j9faulk

Thank you for your constructive criticism ACG. I am not sure I am in a sulk just frustrated by a system that is clearly flawed. I thought the Government had put in place money to aid mortgages and help boost the economy and housing market. Maybe I should try Lloyds or HSBC as they are lending our money which the Government used to bail them out when they had made so many bad investments.:p

I am more than happy to move on to another lender however there are not that many out there bearing in mind so many of them are part of the same organisations ie N&P and Yorkshire, Co-Op and Chelsea, Santander which has numerous organisations now under it's corporate umbrella therefore having the same lending criteria.

I see you are a Mortgage Advisor and therefore advocating the use of said organisations and I have done in the past, and may well do again if it would appear that I cannot resolve this myself, however it was advise regarding organisations with more relaxed lending criteria that I was after to give me a starting point next week of organisations to try.

I once again thank you for your reply and if you know of any organisations that use income multipliers rather than affordability calculators I would be grateful as I think these may well suit our situation better.

ACG

I removed the sulking comment in an edit - i realised it was a bit on the personal side, so i took it back.

I am a mortgage advisor but thats not why im suggesting you use one. It has no effect on me one way or the other - if you went on the lenders websites and played around with their calculators or read their criteria there is no reason why you could not do this yourself, but you need to be prepared to do the donkey work.

As far as im aware HSBC have not been bailed out or taking up any of the funding for lending scheme. Theyre also not lending your money - theyre lending the governments money, if it was your money it would be in your account, you wouldnt have to ask to borrow it - but im not getting into that conversation as its pointless - i used to have conversations like that when i worked at RBS and had to be polite and put up with it...i dont now im self employed.

Ive just counted 30 lenders we have access to (before stopping), not including companies that were somewhere down the line the same (RBS/Natwest for example). So there are no shortage of lenders, you just need to get looking.

I dont think any lenders use income multiples anymore, since the recession hit they all now base it on affordability.

Do a search for mortgages, write down the lenders who you would be happy to go with and then play around with their calculators or read their criteria on what they accept (and how they would view the property in the background), it can be time consuming but thats part and parcel of doing it yourself.

Im always reluctant to mention lenders on here because i would hate to be be seen as giving advice or leading im also not 100% sure on whether or not were allowed to.

kingstreet

j9faulk wrote: »

OH £24,203/annum
me £8135/annum

child benefit £1,752
tax credit £1,170

Property value £225,000 +

Mortgage required £113,000

Finance;-

£39.38 per month balance £354 (9 months remaining)

Barclaycard Credit card with £419 outstanding

£695 current payment to Santander - to be repaid

Flat which is on a BTL of £79K and is worth £125k. We pay £170/mth interest only and receive an income after agents fees of £591/mth.

Two children

Right. The above is all that's needed.

Let property/mortgage is self-financing, so can be ignored.

Based on the other information above, you should be able to borrow £153,000 over 25 years. Less if you want a shorter term.

Find a broker to take this on for you and stop worrying about what individual lenders do, or don't do, as the case may be...

Life is just too short.

FWIW - Yorkshire BS Group is YBS, Chelsea, Accord & N&P and they have some strange ideas about underwriting mortgages these days. Co-oP and Britannia are one and the same. Santander is Santander, but still uses the Abbey name for brokers and LBG is Lloyds, C&G, Halifax and Bank of Scotland.

Either way, there are options for you if you really want them.

j9faulk

Thank you ACG in coming back with this information I appreciate it. :beer: I am more than happy to do the donkey work as I have always found it difficult to 'let go' & give the responsibility to others.

I think my main concern is the fact that quite a number of companies ask for an application fee which you have to pay before they tell you whether they will lend you the money. I know my brother, who was using a broker, ended up paying for two of these before finally getting a mortgage with a 3rd. This can obviously end up with a considerable expense.

I will take your advise and carry on with my search which I have been doing for a past couple of hours.

j9faulk

Thank you Kingstreet, some really useful info there. I shall do some more research, I'm sure there is the right mortgage out there and with the help and advise I have received from here I am sure I will find it. :beer:

ACG

Dont use the broker your brother used if you do use a broker then :-P

Add the application fee to the mortgage, if the lender allows you to overpay then you can pay it off on month 1 so your not being charged interest on it. That way you dont have to pay it upfront and you do not risk losing money - not all lenders will do this but the vast majority will.