Halifax Making Life Difficult For Such an Easy Request!

spire2009

The Facts
We took out a buy to let mortgage for £47,775 in March 2010, it now has a balance of £8,400 and the remaining term is 11 months with repayments of £845pm

In November 2010, we took out a £84,500 mortgage on a holiday home, it now has a balance of £64,000 with a remaining term of 84 months and repayments of £903pm

My Request to the Halifax
To increase the term of the buy to let mortgage from 11 months to 35 months which will reduce the monthly repayments down to £255.

To reduce the term of the mortgage on our holiday home from 84 months down to 41 months which will increase our monthly repayments to £1,670.

The Problem
In a telephone conversation with the Halifax this morning, I requested that the above be implemented only to be told, first of all, that I would have to complete a new mortgage application which would take up to 8 weeks to process and when I stamped my feet, I was told at best they would need to conduct a 40-50 minute telephone interview before any changes to our mortgages could be made. Their reasoning was that they needed to comply with the Government's Mortgage Market Review Directive!

I've never heard so much tripe in my life! Our credit scores / debt repayment history is superb, why therefore is such a straight forward, simple request turning into a ball-ache?

It feels like the Halifax are turning the Government's MMR Directive into a selling opportunity that quite frankly I'm not interested in.

Thrugelmir

Extending the mortgage term of the BTL is in effect making a new mortgage application. Likewise reducing the term must be assessed for affordability. So quite rightly your lender is following due process as set out by internal board policy. As it is they that get fined for not doing so.

I've never heard so much tripe in my life! Our credit scores / debt repayment history is superb, why therefore is such a straight forward, simple request turning into a ball-ache?

Lenders reaction will be tough. We know nothing about your personal finances. These are our terms of trade. If you don't like them switch to another lender.

mrginge

spire2009 wrote: »

...Their reasoning was that they needed to comply with the Government's Mortgage Market Review Directive!

I've never heard so much tripe in my life! Our credit scores / debt repayment history is superb, why therefore is such a straight forward, simple request turning into a ball-ache?

It feels like the Halifax are turning the Government's MMR Directive into a selling opportunity that quite frankly I'm not interested in.

How do you know it's tripe?
Have you read the MMR?

No, didn't think so....

haras_nosirrah

Halifax is right.

Any change to mortgage term, mortgage repayment type or mortgage amount will come under mmr which means it has to be advised (hence the hours long phone appointment) and will be subject to affordability checks. Don't like it then try to change your mortgage to a new provider or leave it as it is

Wonga have just lost 330million for lending money to people without doing adequate affordability checks.

Could you instead overpay on the holiday home mortgage (up to any allowable limits) - this then doesn't require the checks

You won't be able to reduce the other one without going through the fully advised service

spire2009

Thrugelmir wrote: »

Extending the mortgage term of the BTL is in effect making a new mortgage application. Likewise reducing the term must be assessed for affordability. So quite rightly your lender is following due process as set out by internal board policy. As it is they that get fined for not doing so.

Lenders reaction will be tough. We know nothing about your personal finances. These are our terms of trade. If you don't like them switch to another lender.

Thank you for your reply.

Our current account is with the Halifax & has been for all of our working lives, so they know exactly what goes in, what goes out & what's left over every month.

Likewise we have a savings account with them, that has a sizeable balance.

Banks / The Government are making it difficult for people who can manage their money & have a positive track record with lenders.

jimjames

Can you explain why you want to switch the mortgages as you are proposing? Relative interest rates?

spire2009

haras_nosirrah wrote: »

Halifax is right.

Any change to mortgage term, mortgage repayment type or mortgage amount will come under mmr which means it has to be advised (hence the hours long phone appointment) and will be subject to affordability checks. Don't like it then try to change your mortgage to a new provider or leave it as it is

Wonga have just lost 330million for lending money to people without doing adequate affordability checks.

Could you instead overpay on the holiday home mortgage (up to any allowable limits) - this then doesn't require the checks

You won't be able to reduce the other one without going through the fully advised service

Thank you for your reply.

I don't like it because the bank are prepared to waste my time & theirs for what both parties acknowledge is a formality.

Was MMR really introduced to inconvenience existing borrowers who have a track record of repaying debt without fault? I don't want to borrow more money, I just want to clear the decks faster!

jimjames

spire2009 wrote: »

Thank you for your reply.

I don't like it because the bank are prepared to waste my time & theirs for what both parties acknowledge is a formality.

Was MMR really introduced to inconvenience existing borrowers who have a track record of repaying debt without fault? I don't want to borrow more money, I just want to clear the decks faster!

As far as I'm aware the MMR doesn't apply to BTL. So are Halifax applying it incorrectly - or is it due to the changes to the holiday home mortgage? Could you try to do the BTL change which won't need the review but may need application and just overpay the holiday home?

spire2009

jimjames wrote: »

Can you explain why you want to switch the mortgages as you are proposing? Relative interest rates?

We have a small property portfolio, all of which have been paid for / or will be paid for by my 41st birthday. The holiday home is the only one that needs bringing in line to ensure that happens & by extending the term on the buy-to-let, it allows me to aggressively repay this mortgage.

The rates on both mortgages are almost identical.

spire2009

jimjames wrote: »

As far as I'm aware the MMR doesn't apply to BTL. So are Halifax applying it incorrectly - or is it due to the changes to the holiday home mortgage? Could you try to do the BTL change which won't need the review but may need application and just overpay the holiday home?

They weren't prepared to implement either change without a review. However, having researched the subject, you're right about the buy-to-let, so it's my intention on Monday to go back to them, request the change on the buy-to-let & then make overpayments on the holiday home as you've stated above.

ACG

The BTL mortgage does not really fall under MMR. So that is pretty much rubbish - although there are some exceptions and some lenders may have just brought similar processes in across the board to make it easier for their employees/systems etc.

The other mortgage may do if its a residential mortgage and so rightly Halifax do need to assess affordability... you banking with them means nothing as you could have 10 bank accounts with different banks. On top of that, the general customer service mortgage people/sales mortgage people can not see your bank account. That wold be a breach of data protection. The underwriters probably can as will some managers I would imagine.

If YOU want to make changes to your mortgages then they cant just flick a switch no matter how much you stamp your feet. Its a heavily regulated industry and they have certain procedures to follow, some of which are their own, some of which are govt rules and some of them are european rules.

So you either go through their processes on both mortgages, or you go through processes with other lenders or you hold tight.

It doesnt work in the sense that you are upping repayments on one but lowering on the other so it sort of even itself out.