Nationwide - 3 person application issue

G-man72

Hello Forum Friends.

I’m submitting this post in the hope that someone will be able to offer some advice on a mortgage issue that has left me perplexed.

A bit of background information…back in 2012 my father passed away and my mother struggled to cope with the loss and the loneliness it brought. To help, my wife and I decided that we would sell our property and move in with my mother as her house was larger and able to accommodate us and our two children. It was agreed that we would buy two thirds of the property at the current market value. In May 2013 we applied to the Nationwide for a mortgage, which was approved, but with the request that my mother was named on the application (the liability remained with my wife and me). My mother is 73 with no outstanding debts on the property.

Back to present day…we have recently finished an extension on the property that was funded by myself and we require a small amount of funds (not small enough for a loan) to complete the project. The source of the funds would come from additional borrowing against our mortgage. If approved the total LTV would be 60%.

I phoned the Nationwide call centre to start the application only to be advised that they were no longer accepting changes to mortgages with three or more applicants (we didn’t get as far as confirming the reason for re-mortgage, available capital, income etc.). I was informed that this was due to a change in their policy that was implemented in October 2013 (our local branch also reaffirmed). We received no correspondence informing us of this change last year.

As a result, I am now stuck with the Nationwide until July 2015, unable to apply for additional borrowing and would currently have to pay £4.5k (early redemption fee) for the pleasure of leaving the policy to move to another lender.

To me, this is another case of ‘sorry…computer says no’. There has been no attempt to personally review our application, take into consideration that it was their request to have my mother as an applicant or to provide a justifiable reason why the policy was changed.

Being just an insignificant policy number to the Nationwide, is there any point in pursuing this further?

Any advice on what action can/should be taken would be gratefully received.

Kind regards

chanz4

nothing to persue, thats their policy on new lending

ACG

How could they offer a review on a mortgage they cant review?

Their criteria has changed over time, thats what banks do. They change it to reflect what their lending appetite is at the time. They do not have to inform you of changes to new criteria.

They have done nothing wrong. You have 3 choices:
- Pay the ERC and move lender.
- Wait until you are out of the ERC period.
- Obtain a secured loan - there is no limit (within reason) on how much you can get on these. The rate will not be as good as nationwide can offer you but but it is likely to be cheaper than paying £4.5k, you can then switch to a new lender next year.

Thrugelmir

G-man72 wrote: »

To me, this is another case of ‘sorry…computer says no’. There has been no attempt to personally review our application, take into consideration that it was their request to have my mother as an applicant or to provide a justifiable reason why the policy was changed.

The time to put suitable finance into place is at the beginning of a project not the end. So in no way can the NW be deemed to be at fault.

You wanted to buy two thirds of the property. So your mother had a financial interest in the property. On this the NW was also correct. All parties named on the deeds have to parties to the mortgage.

Keekles

With the introduction of MMR next month you'll also be finding it incredibly difficult to find many lenders that allow for three applicants. There are others available at present, so it may be a case of having to swallow the £4.5k ERC.

Sorry not to give you any better news..

G-man72

Hi Keekles,

Many thanks for taking the time to review my post correctly. Having read into the introduction of MMR this now makes more sense.


Thanks again!

ACG

Giving an answer you dont like does not mean we read it incorrectly.

Thrugelmir

G-man72 wrote: »

Hi Keekles,

Many thanks for taking the time to review my post correctly. Having read into the introduction of MMR this now makes more sense.


Thanks again!

Wider issues than MMR alone.

Keekles

My post was more of an addition to your other responses to be perfectly honest, but no problem.

Obviously have no idea of your incomes etc. but it may be an option to buy your mother out? Provided she won't have a financial interest in the property, lenders shouldn't have a problem with it. This will reduce you to just two applicants opening up your options somewhat.

Aside that, it means your mother achieves cash from the sale of the property.

Obviously I'm not a financial adviser so don't take it as gospel, although it might give you some options to consider for yourself.