Increase in borrowing - issues with lender....

pinklady21

I have been with my existing lender for a number of years, no issues. I want to increase my borrowing for some home improvements. The process is proving very trying indeed, for reasons I do not fully understand. Can anyone help?

I have passed all the credit and affordability checks for the increase in borrowing, and have an offer letter to that effect. Getting to that stage proved very time consuming with a lengthy phone call with an "adviser" - which did not go well - by the end of it I was on the point of making a formal complaint. The lender is now awaiting further documents from me before they make the offer final.

I now wish to decrease the additional amount borrowed - mainly to keep the overall LTV within the lender's lower interest rate tier.
I would have thought this would be a simple process - simply changing one figure, everything else being the same. Apparently not - they want another lengthy phone call to go through other figures as well. I really did not get on very well with the adviser - and do not relish the prospect of having to spend any more time.
I know this sounds lame, but I really was raging the last time.....the whole thing seemed designed to support arcane processes at the bank, rather than offer decent customer service.
Can anyone in the industry offer me advice?
Is the lender correct to demand all the information again?
What are my options here - would a formal complaint lead anywhere?
Thank you!

amnblog

Options are.

Continue with this poor service

Remortgage the lot elsewhere

Borrow the extra elsewhere

Thrugelmir

The "adviser" would have been following a set script. If you don't like your lenders policies then switch to another.

minimike2

You don't actually give any specifics in your post as to why you don't feel the call went well.

It sounds more like to me you just want to call up say in 5 minutes what you want and get it done.

It doesn't work like that.

Post MMR regulation means a lender has a lot more to do than what would have historically taken place. You are asking to borrow money - You are not "entitled" to that money. The lender needs to firstly assess the appropriateness of the lending, then give you regulated advice as to the best product for you, as well as assessing your application against their policies, including an affordability check.

Could you possibly expand on your post, because from the sounds of it the advisor is just doing their job correctly.

pinklady21

Thanks for the replies.
My question relates to the reasons I have been given by this adviser for this requirement to go through the process again - it's the "mortgage legislation".
Is this correct?
Who can point me in the direction of this "legislation"?
I ask - as if it is indeed legislation-driven then I will have the same issue with other lenders.
I understand that the law was changed fairly recently making applying for a mortgage a more onerous process - however how does the legislation apply in this situation?

minimike2

There is a material change to what you are asking for, so yes, they need to go back through parts of the process. It doesn't mean doing the whole thing over again from scratch, they just need to re-visit the parts that are changing. So if you are amending your loan amount, then you will need to go back through the justification of the amount you are borrowing. This will also have a knock-on effect to other parts of the mortgage advice. For example it could have implications on the term of the borrowing as well, depending on what discussions took place.

The borrowing amount is part of what they are recommending on. A recommendation would have been justified following your application. They will have completed their fact find with all of this justification. They can't then simply just change the loan amount without due cause, and having that justification for the change fully documented.

If you want to spend your summer holidays reading up on it (you will need them) then google the "FCA MCOB Handbook". That should give you a good starting point.

amnblog

474 pages to get you started on the rules

https://www.handbook.fca.org.uk/handbook/MCOB.pdf

pinklady21

Thanks everyone - I think what has me flummoxed on this is:

1. They already know me as an existing customer with an unblemished record - I am not someone who just walked in off the street.

2. I am actually asking for a 20% decrease in the amount borrowed - they have already approved the higher amount, so lower borrowing amount = lower risk for the lender.
Why the faff?

minimike2

Going round in circles here.

The answers are not what you wanted to be told. You aren't going to get anywhere going back to the start and trying to get a different one, because it won't change.

Answers to both of your above points are already answered in previous replies.

AnotherJoe

pinklady21 wrote: »

Thanks everyone - I think what has me flummoxed on this is:

1. They already know me as an existing customer with an unblemished record - I am not someone who just walked in off the street.

2. I am actually asking for a 20% decrease in the amount borrowed - they have already approved the higher amount, so lower borrowing amount = lower risk for the lender.
Why the faff?

Because they are covering their behinds due to past history where they went the other way and lent indiscriminately