Mortgage declined

Amandaw

Hello! I have joined this forum in hope that someone out there can give me some information on where I stand.
It's quite a long story, so I'll try summarise.


We wanted to sell our flat to buy a family home eight years ago. We couldn't, as it was in negative equity. Instead, Santander allowed us to keep the flat and mortgage (to rent out) and buy the family home. So we have two mortgages, both with them.


We have been made aware, over the last couple of years. That we have an excellent mortgage deal and Santander will want rid of us. Variable tracker, flexible off set mortgage, 0.49 above the base rate. It's also a lifetime portable mortgage.


We wanted to move house, so thought we better do our homework about this mortgage. Couldn't believe our luck when they agree over telephone appointments we could take the mortgage to our new property! It also meant we could purchase at a slightly higher rate. We went through as many stages as physically possible to secure our mortgage. They said we would need to put in a formal offer on a house to go through the final stage. We put our house on the market and found a great new home four ourselves. Both bought and sold in under four week.


Finally we could arrange our final meeting with Santander to secure our mortgage. Fifteen minutes in we were told we would now be refused unless we took our flat out of negative equity (this is a huge sum). Santander have agreed we have been 'misguided' during the process but are unwell to change their decision.


I understand things change over 8 years, but we are not applying for a new mortgage, we are within our rights to port our mortgage. And if things have changed why was I not informed.


Also, both mortgages are with them, why have I been able to take this process so far.


I am now left with a house, I wont be really be able to afford at the higher interest rate. And I'll be lucky if I even secure a mortgage it time for the moving dates now!


Santander complaints team have told me I should have secured buying a house before selling my own. I have never heard of anything so crazy.


Am I fighting a losing battle here folks?


If you could give me any knowledge, whatsoever, I would be eternally grateful.


Amanda

kingstreet

You cannot transfer a mortgage from one property to another.

You may be able to port the rate from an old mortgage to a new one, if you qualify for that new mortgage like anyone else, subject to credit, affordability and property checks.

Nothing to suggest, I'm afraid. Complaint may see you awarded £50 to £250 for inconvenience.

Amandaw

Hi Kingstreet
Thanks so much for taking the time to reply. I really appreciate it.
Based on my current situation, they told me I was eligible, but decided to change the benchmark/inform me of changes at the final hurdle.
If they pay me the compo every month, I might still be able to afford my new house... lol

Dave_Ham

Unfortunately Santander have a track record when you look on here, of not giving the right information up front.

Porting as Kingstreet rightly confirming is not a guaranteed option, rather the opportunity to keep the rate/product.

Whilst I understand the frustration this has caused, £250 - £500 goodwill is about the limit I would imagine.

You either need to see if there is another lender that will take on your situation (this is likely to be easier through a broker) or alternatively shelve the moving until you can pay down and meet Santanders criteria now..

Best of luck

Amandaw

Thanks for your understanding and reply Dave. I have started a formal dispute, but it's looking quite likely then that it's going to get me know where
If I had known from the start, I would have never let myself get is the awful position.
They've admitted I've been misguided but no apology!


Thanks again

DandelionPatrol

Leave aside the dispute, what is the value of each of the 3 properties and their respective mortgages? To see if there could be a way out of the pickle.

Amandaw

Hi Dandelion!
The flat is in 7000 negative equity but we need to pay 25% deposit. The valuation is 115000, the house is 240000 mortgage 160000 and new house valued at 295 (paying 314) and we're paying a 10% mortgage.
We can afford to pay out and get the flat out of negative equity but will be left with no money do the house up, which is s complete must unfortunately...

DandelionPatrol

Amandaw wrote: »

• but we need to pay 25% deposit
• new house valued at 295 (paying 314) and we're paying a 10% mortgage.

What do you have to pay a 25% deposit on?
What do you mean by a 10% mortgage????

Amandaw

We need to put 25% cash into the flat so it's not in negative equity.
We're putting in 10% of the valuation of the new house, so that's 29500

DandelionPatrol

OK you start off with equity of -7000 and +80000 ie +73000

And you must put 30500 into the flat [25% of 115000 + 7000] and 29500 into the house as your 10% plus a further 19000 as the shortfall on the valuation to the actual price, meaning you have to find 79000.

Unless you have other money, this is never going to work. I suggest your real problem is that the house you are trying to buy does not value anywhere near the purchase price.

You could I suppose renegotiate the purchase price or attempt to get the valuation revisited. But if neither of these work, you need to have some savings to throw at it. Otherwise, it is move on from this and look for a property which will value for the amount you are buying it for.

Amandaw

Your calculations are spot on.
Unfortunately, the area we want to move into has tough competition and the houses go well over their valuation price.
Thanks so much for taking the time to reply.