Can you be turned down a mortgage on a house you already own?

louiserer

I am not sure how this works so just thought I betterask.



Is it possible to get a Mortgage in the first place but thennot be able to re-mortgage when the product ends?



What happens if you’re living in a house you have brought with a mortgage and wish to get onto a new product but can’t? With affordability and things, what happens if in the interim you now have a family and they think you can no longer afford it?



I hope that makes sense.

amnblog

yes, it is entirely possible.

louiserer

What happens to you in that case?

amnblog

you stay on the mortgage you have - provided you pay it in full and on time.

Sinhanada

I believe you will carry on with the same company at whatever rate was set for when the mortgage offer finished - it would depend on the mortgage you have and whether it was fixed with a set rate after or a tracker

ACG

If its not affordable in the eyes of the lender then they can refuse to put you on a new deal. If you are tied in and then fall into arrears you may potentially have early repayment charges to pay should you be evicted.

That is putting you in a worse position and so they are within their rights to not put you on a new deal.

If you want to explain your situation - income/kids/expenses/mortgage amount - we can tell you whether there is any chance of getting a new deal as not all lenders underwriter in the same way.

louiserer

Thank you for your replies.



I just wondered for example,

We were to move in to our new house as they believe themortgage is affordable now. If in timewe decided to start a family and maybe one of us have a reduced wage to carefor children and they then consider it not to be affordable what could happento us?

kingstreet

You simply have no choice but to accept the "follow-on" rate from when you took out the original product. This is more than likely the lender's standard variable rate.

The lender isn't going to tell you you have to sell your house, or pay back your mortgage. It just means you may be unable to get a customer retention product from your existing lender and may not be able to remortgage to a new one.

louiserer

I see, thank you.

I thought there must be some way of going about it but wasn't sure.

I assume now with MMR even though you may have had plenty of time on your current deal to prove you're 'good for the money' they will go through affordability all over again to see if circumstances have changed?

lovinituk

louiserer wrote: »

they will go through affordability all over again to see if circumstances have changed?

Our mortgage company didn't recently when we renewed a deal at the end of a fixed rate.

Thrugelmir

louiserer wrote: »

I assume now with MMR even though you may have had plenty of time on your current deal to prove you're 'good for the money' they will go through affordability all over again to see if circumstances have changed?

Lenders will assess affordability at 6% -7% interest rates even now. So there's a degree of caution built into MMR.