Help/advice with mortgage condition

itsamystery_2

Hi,
I'm after some advice because I can't seem to get any from Woolwich - apparently all their underwriters are 'busy'.

I have the following condition on my new mortgage application (I am porting an existing Woolwich mortgage and topping up).

"13. Your existing mortgage with Barclays account number... (the existing mortgage) must be repaid on, or before completion of this mortgage without taking on any further borrowing from another source."

What exactly does this mean? The reason I ask is because I am putting my existing house on a BTL and both this (the BTL mortgage) and the additional Woolwich mortgage were recommended to me by an Independent Mortgage Broker.

Thanks.

P.S - My solicitor is on the case but we are due to complete tomorrow and it was spotted on Monday!

Goldiegirl

I think they may have made a mistake on the offer.

They are saying that the current mortgage should be repaid before you complete your new mortgage, or repay the old mortgage at the same time you complete you new mortgage.

However, as they have agreed that you can keep your old mortgage on a BTL basis , the condition on the offer should say that your current mortgage doesn't have to be repaid.

You'll need to contact them to get this changed

holly_hobby

You mention your broker recommended this format, but was the retention of the curent mge formally agreed by Woolwich at point of submission ? (ie did your broker contact them, explain the position .ie the current mge will remain o/s, but will be rented out under CTL/BTL permissions, and they agree this was acceptable ?).

If not, it means as GG says, that the existing mge must be redeemed by the time you complete your new Woolwich mge (inc ported mge product).

So its urgent and vital that you bottom this out before proceeding any further.

Hope this helps

Holly

itsamystery_2

holly_hobby wrote: »

You mention your broker recommended this format, but was the retention of the curent mge formally agreed by Woolwich at point of submission ? (ie did your broker contact them, explain the position .ie the current mge will remain o/s, but will be rented out under CTL/BTL permissions, and they agree this was acceptable ?).

If not, it means as GG says, that the existing mge must be redeemed by the time you complete your new Woolwich mge (inc ported mge product).

So its urgent and vital that you bottom this out before proceeding any further.

Hope this helps

Holly

My broker is on holiday until next week so I can't ask those questions.

Just to clarify... I am obtaining an BTL from Birmingham Midshires for my current property and porting my current mortgage to the new property and borrowing the difference.

Essentially...
Current property is valued at £140k. I'm leaving £35k equity in and borrowing £105k from BMid on a BTL.

New property is £192k which is made up of equity, £47k Woolwich port and additional mortgage from Woolwich.

I've spoken to Woolwich and got them to escalate things but it's stressing me out!!!

GMS

The current mortgage will be repaid with the BM mortgage advance with the ported mortgage being a new account with the same rate and terms as the original.

itsamystery_2

GMS wrote: »

The current mortgage will be repaid with the BM mortgage advance with the ported mortgage being a new account with the same rate and terms as the original.

So are you suggesting that everything should be ok?

My solicitor seems to think it may be a problem.

Goldiegirl

I think you do still need to get in touch with Woolwich, as the condition specifically says the current mortgage has to be repaid without taking on any further borrowing from another source.

As you intend repaying it with the BM mortgage, this is clearly lending from another source.

It implies that Woolwich aren't aware that you will have two mortgages (theirs and the BM mortgage)

I think your solicitor is right in thinking there's a problem - I think you urgently need to speak to the Woolwich about this

GMS

itsamystery wrote: »

So are you suggesting that everything should be ok?

My solicitor seems to think it may be a problem.

Is your solicitor dealing with both transactions?

The current mortgage will be repaid and charge removed from property in favour of the new charge from BM.

The new property will have a new mortgage and charge placed on it for Woolwich. The original mortgage has gone, the rate has been place don the new one with the rest at current rates.

That's my take on it anyway.

Does your new mortgage have a different account number to the current one?

itsamystery_2

GMS wrote: »

Is your solicitor dealing with both transactions?

The current mortgage will be repaid and charge removed from property in favour of the new charge from BM.

The new property will have a new mortgage and charge placed on it for Woolwich. The original mortgage has gone, the rate has been place don the new one with the rest at current rates.

That's my take on it anyway.

Does your new mortgage have a different account number to the current one?

The new mortgage has a different account number and consists of two parts - the ported mortgage loan amount and the new loan amount.

They are not being dealt with by the same solicitor. The Woolwich mortgage is being dealt with by my solicitor but BMidshires appointed their own solicitor (Gordon's Property Lawyers).

Gordon's have both the BMidshires offer/terms and the Woolwich offer/terms.

holly_hobby

Ok, so you're remortgaging the existing property from Barclays onto a BMids BTL.

And whilst the Barlays mge WILL be redeemed (as Woolwich require), you are (as GG correctly states), actually effecting further borrowing, in the form of a NEW mge with BMids.

There is certainly cause for concern here - if your broker is out of the picture deal with Woolwich yourself to bottom this out and/OR postpone completion until you are able to establish what their exact requirements are regarding you holding what will be an additional mge with BMids (albeit a BTL).

As a note, you're not porting your actual borrowings, but the mortgage product that applies to them (ie - fixed, discount etc), which will run over its remaining term, and applied to an equal amount of borrowings under your new mge (with any residual on a supplementary product form their current range) - hence the 2 reference numbers.

Hope this helps

Holly

itsamystery_2

Goldiegirl wrote: »

I think you do still need to get in touch with Woolwich, as the condition specifically says the current mortgage has to be repaid without taking on any further borrowing from another source.

As you intend repaying it with the BM mortgage, this is clearly lending from another source.

It implies that Woolwich aren't aware that you will have two mortgages (theirs and the BM mortgage)

I think your solicitor is right in thinking there's a problem - I think you urgently need to speak to the Woolwich about this

That's what I/my solicitor thought. The problem with Woolwich is that I can't speak to anyone and their call centre is not UK-based (which makes it much harder to explain and find out things!)