in principal - Approved, in Reality - Declined

rie340

I had an existing Mortgate wth Santander and sold my house. I was infomed that my new mortage application (33K less than original loan) was offered in principal and that I had 3 months to port my mortgage before the early redemption fee of 2k would be lost. I paid the mortgage off in full - found a new property and my application was declined and slammed with a 2k early redemption charge!
I have made contact with them and they tell me an adverse credit score 5 years ago is affecting my application.
But my original mortgage with them was only taken out 2 years ago and for 33k more than I wish to borrow now!
Should I take it on the chin and move on - or take it further??

rosemarynolan

I'm not really able to help but I had my mortgage from Halifax declined yesterday after the 'Mortgage in Principal' and having spent a lot on solicitors and the valuation. Mine was declined because my credit check had dropped since I first applied. I found out why it had dropped- because of my new current account the I opened with Halifax! The age of my new account had reduced my credit rating even though that new account is with the bank I was meant to be getting the mortgage from.

I feel totally confused and upset about the whole situation. There is now an appeal on the mortgage decline but i'm not hopeful.

Any help you be appreciated.

rosemarynolan

Oh, and I just heard on the new this evening that the Bank of England want to slow down the number of mortgages being given out because of the rise in house prices.....hmmmmm- think they have anything to do with one another?

GMS

rie 340 - What is the adverse? Santander allowed adverse subject to credit score aorind 2 years ago but then changed their policy to none allowed. Any porting is a new application and subject to criteria at that point so looks like you fell outside of their policy. Not a lot you can do other than go elsewhere.

rosemarynolan - If the Halifax account is the only issue I would appeal it on the basis of trying to streamline your finances.

Thrugelmir

rosemarynolan wrote: »

Oh, and I just heard on the new this evening that the Bank of England want to slow down the number of mortgages being given out because of the rise in house prices.....hmmmmm- think they have anything to do with one another?

Far more complex a matter. BOE wants to see money lent to business to keep the economy growing. High levels of consumer debt are merely creating more problems for the future. Removing FLS will require lenders to attract retail deposits as well. So should improve savings rates in the medium term.

magpiecottage

Clearly if a property is downvalued or your circumstances change, then a lender must be entiltled to refuse to honour a mortgage in principle as that is something it could not have known when it was given.

However, the only reason is that the lender has changed its mind then that is clearly not fair and I would complain.

For the OP it is a little more difficult. However, again, the mortgage was taken out 2 years ago and the default 5 years ago so it seems it was hardly news to them! Whilst you cannot complain about the criteria per se, there is an argument that you were misled.