Mortgage concerns

Poppy70

Hi - This is my first post, I've found the site so informative that I thought I'd see if anyone had any thoughts on our situation.


We have recently sold our house and completed the sale (so we are currently staying with Mum) in doing so we took a big hit with a redemption penalty (12K) - We had a 5 year fixed rate & the redemption period was due to finish 31/08/14 - However we were told by the Chelsea that we could port our mortgage and in doing so reclaim the penalty so we were not too concerned


We have now found a new property and approached the Chelsea to start the porting process, we also requested a further £20K on top of our previous outstanding mortgage. As the overall amount we require totals what we owed the Chelsea a few years ago we didn't think this would be an issue especially given that our income has gone up.


Since our sale we have paid off credit cards and cleared our overdraft so have no outstanding debts. We have never defaulted on any commitments & our credit reports show as excellent.


We earn a combined basic salary of £92,780 and we are looking to borrow £284'750 giving us a LTV of 85%.


We were told that the DIP was all ok, however we have heard back from the Chelsea today to be advised that our application has been referred to the underwriters as it is showing as unaffordable.


I maybe worrying unnecessarily (I hope) but I wondered if anyone could give me their thoughts on our application? Apologies for the long winded post!!

ACG

Chelsea - part of YBS... your in for some fun and games. However old you are you will feel 10 years older by the end of it.

It may be that your debts are not showing as satisfied on your credit report?
https://online.ybs.co.uk/public/mortgages/quick_enquiry.do - check whether it is affordable on their calculator or not.

Poppy70

Many thanks for your response! We did wonder that so supplied the mortgage adviser with nil balance statements when we made our application - When getting the DIP the mortgage advisor told us that there was no problems with our affordability, so the pessimistic side of me is wondering if it is in their interest to accept our application and pay us our 12K redemption back??


I have been worrying about the application especially reading how all the mortgage advisors appear to steer well clear of Chelsea, YBS group etc..


If we are unsuccessful with the Chelsea (which I sincerely hope we are not as it's going to cost us £12K plus the application fee of £450!!) do you think other lenders would consider us with the information I have supplied?


Any replies greatly appreciated!!

Poppy70

I should maybe add when I say mortgage advisor I mean the Chelsea in branch mortgage advisor..

ACG

Chelsea/YBS cant decline an application in order to keep the ERCs, if you believe that is the case if they do decline it then its a complaint job.

Leave it with them, see what they come back with and go from there. If its with the underwriters then it might just be the system that has thrown it out and it will get overturned.

Poppy70

Okay thanks will do - Not looking forward to what's going to be a very long and anxious weekend.

Thrugelmir

Poppy70 wrote: »

However we were told by the Chelsea that we could port our mortgage and in doing so reclaim the penalty so we were not too concerned

Porting does require a complete new application. The Chelsea may feel that in a roundabout way you've cleared your debts by releasing equity. You are then asking to borrow even more on the new mortgage. The underwriter may feel that you've yet to prove you can manage your finances properly. You could end up in the same position again.

The in house advisor would have no insight into the detail of your credit record. So comments made would only be generic in terms of the information available and the questions you asked at the time.

Poppy70

You've got me worried again now.. We have definitely over spent in recent years and consequently used our overdraft and credit cards more than we should have!! So we did use some of the equity to pay off these debts but we have also held back some of the equity (rather than adding it to the deposit) to extend the new property and in doing so hopefully increase the LTV..

dimbo61

New much tougher lending policy starts on the 26th April 2014 for all lenders.
YBS group are bringing this in from the 1st April 2014.
Read up on this in the papers

kingstreet

Recent debt repayment may not yet have been updated on your credit history so I would have entered the last statement balance in the system and noted these commitments would be repaid by completion of the purchase.

If the advisor simply enters "£0" and something is still visible on the credit search, it looks like you've not disclosed your credit commitments.

No way of us knowing this. You have to ask your in-branch salesperson.

FWIW YBS Group can also take into account unused/available credit, so you may have been well-advised to close some of the accounts when you paid them off.

When MMR is introduced in April, a lot more forward thinking is going to have to go in to planning to apply for a mortgage, rather than just applying and hoping for the best.

MaxTheCat

It may be your LTV, I recently took out a mortgage with YBS for 300k and my basic salary is only slightly higher than yours given that yours is combined you probably have greater take home because I'm loosing loads to tax so I don't think your problem is income related. The difference for me was that I had a LTV of 50% so that would be the difference. Also as king street says they may take into account available credit I only have 1 credit card with a relatively small limit so if you have several close some down.