Help needed to find RTB mortgage.

barry54321

Hi,

Help needed to find RTB mortgage.

You can skip this rant and go to the next paragraph if you like.
I got the right to buy my flat - eventually. I cleared credit check and got accepted for a mortgage. The property then got blown out by the mortgage company valuers! Unbelievably the reason given was because there is a high amount of rented accommodation in the block! Seriously, what did they expect? they were the ones offering a RTB mortgage on a local authority property. You have to tread carefully with mortgage applications, too many searches blow your credit rating. But i contacted another three major lenders who come up on searches for RTB mortgages and they all said that if their valuers came back with the same report, they wouldn't offer either. It makes a mockery of the government scheme when the very bank that we bailed out with taxpayer money won't support a government scheme.

Ok rant over, can anyone help me? I am London based and qualify for the full £100k discount, which leaves another £120k to find. I pass credit checking and can afford the repayments comfortably. The property is the problem. it is a two floor maisonette, with a similar property below us and just the roof above us. It's a low rise block, ground floor and three above. Access is via a balcony/deck and communal stair well. To the best of my knowledge there is only one other flat in private ownership.

Has anyone got a mortgage for a similar property? Anyone got any good ideas? Anyone know the email address of someone I can complain to? Anyone had similar problems?

kingstreet

Did you go direct to a lender, or did you use a broker?

Lenders don't like deck access and those who might accept will base the decision to lend on the surveyor's opinion of likely re-sale issues if they have to repossess.

A broker job, unless you want to wander up and down the High Street having speculative credit searches and wasting valuation fees.

barry54321

Hi Kingstreet,

Yes, we made a direct approach to mortgage company that advertised they did RTB mortgages. Naively we though that the hard part would be getting through credit check etc, it never occurred that we would have this problem with the actual property.

We are now looking for a mortgage advisor that seems to know this field.. Is this someone that you could assist with?

Angelicdevil

barry54321 wrote: »

Anyone know the email address of someone I can complain to? Anyone had similar problems?

Complain???

You're getting £100k off a property in London, for which you've had cheap rent on for years and you want to complain?!

Wow.

This has to be a wind up, right?

kingstreet

barry54321 wrote: »

Hi Kingstreet,

Yes, we made a direct approach to mortgage company that advertised they did RTB mortgages. Naively we though that the hard part would be getting through credit check etc, it never occurred that we would have this problem with the actual property.

We are now looking for a mortgage advisor that seems to know this field.. Is this someone that you could assist with?

You need to ask friends and relatives for a recommendation for a broker in your area.

Mokka

Lenders do not like blocks with lots of council tenants. Some specify how many private owned flats they like in the block before they consider lending- HSBC told me there needs to be 75% of privately owned flats in the block. Some lenders will accept blocks with 35%.

Can I ask which bank turned you down?

I am in a similar situation. About to apply for TSB mortgage, worried about losing valuation fees.

barry54321

Hi Mokka,

To be honest we're about to give up on getting a mortgage on the property. My brother was going to remortgage his place, lend me the money and I pay the mortgage for him. He is with the HSBC. When he went in to apply for his mortgage he was told that they do not have a 75% policy. But when we went in before we were told they did. So we have arranged to see same person that he did at the same branch and we have our fingers crossed. Not sure which way it will go. We have been to every mortgage provider in the book and got pretty much the same from all of them. The really dirty bit, the flat next door to us is mortgaged by HSBC. Apparently it is only when buying a local authority flat that they have that 75% rule. Because the place next door was RTB years ago and was then a private sale they mortgaged it no problem. Maybe we will get lucky with the HSBC, if not, then we've given up and it will have to be the family loan.

It is disgraceful that the building societies are blatantly blocking the government scheme. Especially as they are happy to take public funding through the new Help to Buy scheme. The government seems to want to bury their heads in the sand and ignore it. Too much like working hard for them I think.

Oh yeah, and watch out for those RTB mortgage advice services. Half of them are little better than the Pay Day Loan outfits. Just trying to take you for fees up to £1500 up front.

Best of luck to you and fingers crossed for us :-) I will let you know how we get on, please do the same for us. Sorry I couldn't be more helpful

Mokka

To be honest we're about to give up on getting a mortgage on the property. My brother was going to remortgage his place, lend me the money and I pay the mortgage for him.

I am afraid the bank will want to know what the money is for. I would not recommend withholding the truth- this is too serious.

Here is my experience with HSBC.
Most of the flats in my block have HSBC mortgages, so I walk into the bank rather confidently and ask 'Do you do RTB mortgages?'. Very quick 'No' follows. I go home, Google 'RTB' mortgage" and guess who is at the top? HSBC. Go back to the branch. 'I hear you do RTB mortgages. Do you still lend on tower blocks?' 'Yes' but for local LA they will need 75% private ownership. But since your block has so many HSBC mortgages they will probably make an exception'. I make an appointment. I can see panic in the advisors eyes right from the start. He cannot compute how I can be borrowing £xk on £xk property with £xk deposit- he does not know what RTB is. He runs to his colleague. Comes but with a killer answer: 'We do lend on tower blocks but we do not do concrete'.
This makes as much sense as saying :'I am a strict vegan but I eat meat cos it's so healthy'. I am sure if I went to another advisor they would give me a different answer but at this point I am beginning to remember:
HSBC has one of the highest number of complaints, they are second from the bottom in customer satisfaction and I've read somewhere that they reject 81% of mortgage applications these days. Which can be only the result of incompetence. So do I really want to give them my money?

Mokka

Mokka's guide to getting a RTB mortgage

Yes, it is hard to get a mortgage on RTB, that's why the uptake is so low: only 5% of people who applied for RTB since the increase of discount completed the purchase.

First Google who does lend on RTB. The government might own most of the bank but it still can't make the bank lend you money. Most banks have 'no RTB' in their lending criteria.

Then you can Google 'xx bank lending criteria'. This will bring up webpages brokers use. (this will not work with HSBC, as they do not use brokers)
You can go to 'suitable properties' or similar. You will find that a lot of banks do not like maisonettes for some reason. If it is in their lending criteria that they don't, just move on to another bank. If it says: 'we will consider .... subject to...' then you have a chance. Best if it says nothing on the subject. You will find your property excluded for one reason or another. No ex-LA, no access from communal balcony etc. You will be left with a handful of lenders.

The alternative is of course to pay the broker a little (I have found no fee free brokers so far) and they will do all this work for you. A good broker should know if the 'subject to' thing will work. It is important that the broker works in your area and knows your locality. I could PM you my contacts, but they will be useless unless you are in Central London.

You can search this forum for Mortgage Advisors and if they are from you area you can approach them. Or keep asking around- somebody you know will know somebody who used a broker. I know someone who used an Estate Agent's broker and they were really helpful. So not all EA brokers come with hooves and pitchfork hidden under their suits.

Your brother might help by acting as a guarantor. This is a specialist area, so again go to a broker.

To be frank I think the low private ownership is your highest hurdle. Maisonette is the second. If it's concrete then you've got another hurdle.

If you still want to go to a bank directly make sure you start your conversation with:
'Before we go any further, what are your lending criteria on xxxx properties? '
This will only work if the person has the lending criteria in front of them on their computer, not with junior staff who say 'hello' to you when you enter the bank- they cannot tell their Help to Buy from their Right to Buy.

You will find that once you get through to a competent person, the tone suddenly changes- once they realise you only want 30-40% of the value of the property and can easily repay the mortgage they offer the best rates.

IMHO if the bank does not think they can sell your flat and get back the 30% they've lend you then they should not be in the business of lending money. The reason we've had a financial crisis recently was because banks acted irrationally. It is not very reassuring to discover that they still do.

The good news is that there are 100s of mortgage providers out there- not just the big banks- I was not aware of this. The Council of Mortgage Lenders will have the full list.

Only approved lenders qualify for having the first charge on the property. This is to discourage doorstep lending loan sharks from being tempted to offer mortgages to desperate people.

Sadly there are no peer to peer or credit union mortgages yet. i would so much more prefer to give my money to some ordinary saver rather then sponsoring some fat cats' bonus!.