Porting mortgage refused or not!!! Worried sick

Jambat

So basically about three months ago our fixed rate mortgage with Santander came to an end. My wife has had to go part time to cover childcare and we were worried about renewing. We now have a annual salary between us of about £30,000 with a few extra bonuses and child benefits.(we also have about 7k in debt which will hopefully be cleared on sale). However after a five minute conversation Santander reduced our mortgage payments and put us on a lower rate with no questions asked. Three months on we have decided to sell our house and move. we bought a house for 250,000 and are now selling for 350,000 subject to contract.
We have £147,000 mortgage with Santander I want to port the mortgage across to a new home. The new cost 317,000 we do not want to borrow any more or any less just keep things exactly the same. so we will be putting down over 50% equity and also Leaves us around 20,000 in the bank count!!!
The new house will be cheaper to run and put us financially better off with that 20k allowing to clear debt and having spare money.The house is like for like but in a nicer area !!!
We were told we could port our mortgage with no problem at all even know my wife is working part time, however after a conversation and sending our payslips in we have been told that the mortgage is not affordable even after paying all our bills food etc and the mortgage… we Have about £600 spare income a month.
However The adviser told us as we are classed as loyal customer but do not meet the affordability we can still go through too the next stage which is a telephone conversation with a mortgage advisor who will give us an answer.
I'm really confused why they would do this if they saying it's not affordable ? The figers seem to be in our favour ..over 50% equity in house, a cheaper house to run, 20k in the bank account after sale!!
I feel so sick with worry that they don't let us port and was hoping for any advise or thoughts

haras_nosirrah

Couple of questions

What are the incomes
How much is the childcare
What is the debt repayments (Santander will take them into consideration even if you are intending to clear them as not everyone does)
How many kids

Based on the basic amount of info given I don't think this sounds affordable to Santander. When you redid your rate did you get advice or did you go execution only? A 5 min phone call sounds to me like you didn't go down the advice route which would be about 2 hours long. If you went execution only rather than seeking advice you may have cost yourselves some money as I would expect an advisor be it Santander or independent to ask you whether you intended to move and have an idea of timescale and advise accordingly but if you didn't seek advice they have no liability for this as you have done it yourself. Did you tell them you were intending to move in the near future?

If you are changing rate there is no underwriting - this is to prevent mortgage prisoners with people being stuck on variable rates.

Porting is a brand new application and you will be treated as if you are a brand new customer. We can give you an idea of what Santander will lend and it may mean one of the following if Santander won't lend enough

Staying with Santander and getting a property at a lower value
Staying in your current house
paying the Erc and switching lender if another lender will lend enough
Selling the house, paying the Erc and rent somewhere suitable

Santander do not have to port your mortgage. You can move the rate if they will give you a new mortgage on the new property. They do not have to lend to you and even the regulator can't make them. How much is the Erc and how long are you tied in to it to?

amnblog

There is no offer to port the lending - No Lender offers that.


The offer is to port the product rate (so avoiding any early redemption penalties).


The case will have to be underwritten in full on any purchase whatever the lender.

Jambat

Hi 2 children
No childcare costs
£120 in debt repayment on 0%
Still leaving £600 a month after bills , foo etc paid

amnblog

You should stop messing around and engage a whole of market mortgage broker to assist you.

pamelab21

We have just rcvd our mortgage offer with Britannia and we are porting our current product and taking additional borrowing.
We had to go through the full process of applying and providing bank stats and payslips etc. Hours on the phone and despite us coming up with what we had free at the end of the month THEY decide what to deduct for foods, bills etc and came to their own conclusion about our free money after all spending every month. Fortunately we have now passed and have our offer but we have had to take the term over what they have told us it will be as I wanted it over 21 years and they have said it will have to be over 25 to be affordable ( I will overpay)
Anyway, it was not as easy as I thought it would be and if we were refused by our current lender my next stop was going to be a broker.
Good luck.

Thrugelmir

Jambat wrote: »

and also Leaves us around 20,000 in the bank count!!!

Is the mortgage affordable if interest rates were 7%? Lenders not only have to assess affordability but have to act responsibly. Your house move fixes your current debt issues by releasing equity but doesn't resolve the reasons of why the debt accumulated.

Reducing the amount you wish to may assist your cause. Lenders may wonder why the need to release such a sum.

Jambat

Thankyou, the debt was occurred by renovating the house, yes house prices have gone up but ours has gone up 100k in 2 years as we bought a dive and put sweat blood and tears into it.
I guess we could ask to reduce the mortgage but I would of thought investing the money back into the property would be better for both lenders and ourselves , or even putting it in a savers incase rates did go up ,
The mortgage term is fixed for another 3 years so by which point my wife will be returning to full time hours and if rates went up it would still be affordable ?

haras_nosirrah

based on the very limited info

30k joint salary
two kids
£120 debt repayments
child benefit for 2 kids
assuming no pension payments, student loan payments or other salary deductions

coming up around £128k borrowing

if you don't keep back the 20k savings you could just about do it.

if you have any other deductions then it would be less.

this was based on a 30 year term so if you are over 37 then again this would start reducing

Jambat

Thanks , that's half promising, we are under 37 no other deductions apart from pension, and we also have some bonuses, perks I.e petrol allowance that comes in and profit related pay monthly around £100 pm and quartley bonus of about £400 , having said all this I spoke to a Ifa today, who was very confident that with over 50% deposit he had a few options of lenders that would lend funds, based on all the info I gave.. So I have a fall back just pay Santander £4k and walk away !!! Not ideal but if they insist on saying we can't afford a mortgage we are already paying with no missed payments, and won't give us the loan for exactly the same,then it's good by ...crazy how this works...saying we can't afford the new house but it's ok to stay with the mortgage on this house (they gave us 3 months ago) that costs more to run and leaves a debt over our head that we occurred to renovate the house in order to sell

haras_nosirrah

But they didn't agree to give you a mortgage three months ago

They agreed to give you a mortgage however long ago you first bought the house based on your incomes and circumstances at the time and they agreed to lend you that amount of money against that property for however many years you had it for.

what you did 3 months ago was change the rate at which you were paying the same mortgage - a mortgage is a debt secured against the house. There was no underwriting involved as they had already agreed to lend you 147k however long ago you first took it out.

Now you are wanting to move and take out a new loan against a new house therefore you need to be underwritten again and it will all be based on your current circumstances where you now have children and your wife has gone part time for example

They are happy to continue to lend you the £147k against your current house. As you want to move you are ending that contract and wish to start another and they will therefore need to decide if you are good for the money based on your new circumstances