refused extra borrowing on mortgage

the_original_mabel

We wanted to borrow £4k over the remaining term of our mortgage (4yr 6mnth) but were refused 'based on the facts you have given us today'
Ok we are not loaded but we can definitely afford this small amount!

We had the extra assessed on dhs income only (34k) we are 48 yrs old (is this a factor) our credit score should be perfect. We have never previously been refused credit, never missed a payment, no arrears. Nothing. We are not big borrowers but we have had a few car loans (all settled on time no probs)

We have one car loan currently. They assessed our fixed outgoings at £600 per month and our mortgage on top is 540/month. That is from income of 2100 month. That is dhs take home pay.

Having refused us they said they might be able to offer a personal loan instead!! At 13.4%!! (as its under 7k)

They then said they don't lend less than £5k to add on the mortgage and i asked why they had kept me on the phone half hour answering qs when i told them we only wanted 4k. They apologised and said it was an error. I asked if we would be approved for 5k and they said no because of the figures i had given.

We have been in our house 17 yrs, dh im his job for 5 yrs, employed full time.

Can't believe it! In 2005 we easily got an extra 55k for our extension. we don't earn any different from then. We owe about 25k on our mortgage and house worth 180k. Lots of equity.

Bank refusing this is first direct. Been with them 4 years. Mortgage and current accounts good order. Never exceeded od limit. Never missed mortgage payment.

Any ideas anyone?

It's all worked out for best as we will put the 4k on 0% credit card but this refusal is bugging me!

PeacefulWaters

First Direct are fussy.

How much is your property worth? How much do you owe?

I'd complain about the time wasted given the amount you wanted to borrow. It might be an easy £20.

the_original_mabel

We owe about 25k and house worth about 180k. Good tip re time waste. Cheers!

macman

if your income has not increased since 2005 (?) then in real terms it's probably halved. And what you could borrow in 2005 is simply not relevant to 2015, now credit is vastly more difficult to get-it's a different world.

andyfromotley

First Direct are a brilliant bank but i have found them funny when it comes to lending.

On the facts you have given you should easily be able to borrow somewhere. Try a personal loan? there are some very cheap deals out there.

(its obvious theres something they don't like about you as they have offered you a loan at quite a high rate. On the facts given my credit worthiness is not as good as yours, but they are quite happy to lend me money at about half of the interest rate they are offering you)

Try the eligibility checker on here to see how you fare for a loan. i would avoid sainsburys as there are lots of posts on here lately from people with excellent credit histories not getting anywhere the headline low rate. Hope this helps.

the_original_mabel

Thanks all. To macman, i think we do have less money than 2005 in real terms but what i meant is we are more or less in the same position.i would say we are quite comfortably off (we have additional income through my self employment but we didn't ask them to take that into account for the small amount of borrowing
i know things are massively different to 2005 but so is the diff between 55k and 4k.
One thing is we are in the final yrs of our mortgage and have stopped paying the interest part, that is all finished
could that be it?

pathtofreedom

I think it is just the size of the total loan you want. I don't think many lenders do mortgages for 30k so if you have 25k left and needed 5 k more it just might not be worth the business for them. You could try a whole mortgage broker for very small mortgages maybe?

jonesMUFCforever

Did you tell them what you needed the extra cash for?

the_original_mabel

The money is for a new bathroom which we told them. The total cost of the bathroom will be 7k but we have 3k in savings which we also told them.

This is our own bank so they can see how we manage our money. It's the first time we have asked them for anything (large borrowing for extension in 2005 was nationwide) it all seems a bit odd.

Thrugelmir

The amount you wish to borrow and the term its repayable over simply doesn't making lending at current mortgage rates commercially viable.

gycraig_2

Why would they lend you 4 grand over 5 years for the tiny tiny bit of interest they would get on it ?