Idiotic re-mortgage lending criteria

halesowenmum

I just want to rant a bit at what seems to be reallly stupid restrictions I've come up against when trying to make a simple port of my existing mortgage to allow me to buy a smaller house.

Details are:

- I'm buying a house that's £30k less than my existing one
- The LTV rate will go down
- The mortgage payment will go down by about £100 a month
- I'll clear 2 loans using some of the equity which will reduce my monthly outgoings by a further £100 and leave me totally debt-free (well, apart from the mortgage that is!)
- I've been a sole mortgage holder for six yrs - I've NEVER missed a payment.

On top of this they won't count my Child Maintenance unless it was court ordered which is utterly barmy because the courts only get involved when the absent parent doesn't pay up - I've never had this, he has always paid and this can be proven by viewing my bank statements and the current amount verified by letters from the CSA. To this end they state they will only lend about £44k, which half of what my mortgage is already - the mortgage I'm paying each month, perfectly well.

Then in 2013 I ported the mortgage to get a better rate - I had no problems at all even though I was still employed as a temp then, on the same salary as they have assessed me on today, and I switched it straight over with no problems at all! So same circumstances (other than less mortgage, less outgoings, lower mortgage payment). Showing arbitrary, inconsistent application of rules from one remortgage to the next.

I have submitted a complaint to my mortgage company to see if they can re-look at it but I don't hold out much hope.

The thing is, I'm all for caution and not giving people so much mortgage that they get into difficulties - but this seems totally nonsensical when the mortgage is going down, the mortgage payment is going down and my outgoings and debt being wiped out - yet I can't move house to reduce my bills, move away from some antisocial neighbours and contribute to stimulating the housing market in my area. And I'm downsizing to reduce my bills and ensure that I can keep paying my mortgage - seems they'd rather I stay on in this 3 storey 3 bedroom house that's feeling to big for me where I risk not being able to pay my bills.

Anyone had experience of pursuing complaints like this??? Did you get anywhere??

ACG

Is the current mortgage joint where as the new mortgage is solely in your name?

Its normal that lenders do not accept maintenance unless court or CSA ordered... if you have CSA paperwork then the majority of lenders would include this, unless your child(ren) are getting to an older age (typically 14-15 plus).

Instead of clearing the loans, why not see if they will accept a smaller mortgage with the debts in the background - they may not... but they may.

Thrugelmir

halesowenmum wrote: »

To this end they state they will only lend about £44k, which half of what my mortgage is already

Lenders can choose who they lend. There's no right to a mortgage. Nothing personal towards you, but perhaps you don't meet their current lending policy. After all lending is a business.

It isn't uncommon for Child Maintenance to be formalised. Then deduction is made straight from salary, and the recipient receives the money on a regular timely basis.

halesowenmum

The child maintenance is CSA ordered and has been for the last 6 yrs. They were adamant that didn't count.

I have had this mortgage on my own over two different houses, for 6 years, in my sole name, missed payment-free.

Bear in mind, when we talked, I have over £60k equity and was going to put £37k as a deposit reducing the mortgage from £91k to £86k. Their stance was it didn't matter how low it was, there just wasn't enough income. This is ******ks. With my child maintenance and tax credits I'm on +£30k.

halesowenmum

Thrugelmir wrote: »

Lenders can choose who they lend. There's no right to a mortgage. Nothing personal towards you, but perhaps you don't meet their current lending policy. After all lending is a business.

It isn't uncommon for Child Maintenance to be formalised. Then deduction is made straight from salary, and the recipient receives the money on a regular timely basis.

No I know there's no right to a mortgage - but sillyness of application of criteria which really make no sense benefits nobody does it.

Yes, that's what the CSA do and the arrangement I have - a formalised, overseen arrangement through a government agency.

If I'm already paying the mortgage perfectly well and am reducing many aspects, I can't see what the issue is. I can prove what the CSA pays and that I get it every month...

ACG

How much are you earning without the CSA/Tax credits?
How old are the kid(s)?
WHo is the lender?

holly_hobby

The issue is that lending criteria changes, and what was previously acceptable to that particular lender, no longer is.

Criteria can change for various reasons, it can be regulatory - as with the abandonment of Self Cert mortgages, or statistical - and what was accepted even last week can this week be a no-no - thats life I'm afraid.

Maintenance income, generally has always (well at least in my 20 odd +yrs in the bus), had to be under a formal arrangement to be included (ie court order etc), and is typically only accepted until the youngest child is no longer a dependant (which can be 18/19 or so, if they enter further education) - which can accordingly obviously restrict the max term if its reqd).

Working tax credits are generally accepted at 100% under earned income, whilst child tax credits are generally classed as secondary income (aka akin to DWP benefit) and taken at apx 60% of that received.

The only suggestion I can make, is to go and sit with a whole of market/independent mge broker, who will look at what you having coming in, your other financial status and whom will be the most flexible (ie generous) in todays market.

Hope this helps

Holly

halesowenmum

ACG wrote: »

How much are you earning without the CSA/Tax credits?
How old are the kid(s)?
WHo is the lender?

Without CSA/tax credits £19k.
Add on CSA £24k
Add on tax credits = +£30k.

halesowenmum

holly_hobby wrote: »

The issue is that lending criteria changes, and what was previously acceptable to that particular lender, no longer is.

Criteria can change for various reasons, it can be regulatory - as with the abandonment of Self Cert mortgages, or statistical - and what was accepted even last week can this week be a no-no - thats life I'm afraid.

Maintenance income, generally has always (well at least in my 20 odd +yrs in the bus), had to be under a formal arrangement to be included (ie court order etc), and is typically only accepted until the youngest child is no longer a dependant (which can be 18/19 or so, if they enter further education) - which can accordingly obviously restrict the max term if its reqd).

Working tax credits are generally accepted at 100% under earned income, whilst child tax credits are generally classed as secondary income (aka akin to DWP benefit) and taken at apx 60% of that received.

The only suggestion I can make, is to go and sit with a whole of market/independent mge broker, who will look at what you having coming in, your other financial status and whom will be the most flexible (ie generous) in todays market.

Hope this helps

Holly

I think that's what I'll have to do. They've not asked for nor counted any % of my child tax credits - never asked about that.

ACG

Can you not ask if they will extend the term? They may then lend you more and you can overpay to bring the term back down?

halesowenmum

ACG wrote: »

Can you not ask if they will extend the term? They may then lend you more and you can overpay to bring the term back down?

I guess I could give that a go, and see if I take less out if that would help swing it. But I also feel I need to have a bit more of a go about seeing if they will take at least some % of the child tax credits, and count in the CSA-conducted child maintenance. The kids are only 11 and 14 and son is going into further education when he finishes school so there's years left there.

Thanks.

I am sorry to moan I'm fully in favour of caution but when someone's been paying a +£90k mortgage for six yrs perfectly well and wants to take steps to ensure they can keep on paying in that exemplary fashion, it just all seems really daft. I only want to make positive changes for my children and I've been a good and reliable customer for years - I'm asking to borrow less not more. It's very frustrating and disheartening.