mortgage proposal declined

striker44

Hello,

I would like some advise feedback from the experts on mortgages who look at this site. Many thanks in anticipation of any help received.

interest only mortgage £138,000 value of home by local estate agent £270,000 mortgage due for repayment.

Put this proposal sometime ago - has taken a while to supply Barclay's with everything they asked for - extension for 5 yrs until retirement May 2021 - increase monthly payment to £350 which will reduce principal to say £125,000 ish - repayment from a combination of savings £25,000 - pension pot £80,000 - and equity release - evidence of these given including an equity release offer of £88,000 based on £250,000 valuation at our ages now - income net month £1,992 out £1,185.

In 5 years said would repay the o/s amount from a combination of these assets - probably £25,000 savings; £40,000 pension and remainder ER.

After many many telephone conversations and jumping through all the hoops supplying all the documentation asked for; finally advised will not agree to proposal - account put on hold pending sale of home to repay £138,000 - interest rate 0.69% monthly payment £81interest only.

Trying_to_be_good

I have very little idea what you're asking here.

Can you add some punctuation, as I suspect all the figures are here, just in a bit of a jumbled order/description. It would help to know:

Current mortgage outstanding (£138,000?) Monthly payment, interest only £81?
Current house value (£270,000? But by estate agent?)

Mortgage becoming due for repayment imminently?
Or some/all is interest only and you want to change some/all to repayment (leaving £125,000? - what's the plan for repaying that?)? Is the interest only plan the £25,000 savings and £80,000 from pension lump sum? And rest through equity release?

Equity release is not normally considered a plan to pay off the mortgage, it'll just be another mortgage so you'll need to show how it's affordable.

Are you on a +0.19% tracker? It's an amazing rate, presumably you have excess income currently due to your mortgage being only £81 per month, do you have savings to put into paying down the mortgage now?

striker44

Yes 0.19% tracker in 5 years repayment from a combination of equity release savings and pension pot. Initially Barclay's were giving me positive vibes that it should be ok; then after providing all the documentation requested, including on their insistence an actual equity release offer from a lender (L&G) for a lifetime mortgage (no monthly repayment) they decline and require our home to be sold asap to repay loan

Jhoney_2

Have you only started looking at this - albeit they have been dragging things out etc - recently?

Your IO mortgage is due for redemption 2016 and you have only have 25K in the bank and a pension pot not available for 5 years?

I think the bank are alarmed by:-

Why so last minute to organise your financial affairs
Why when on a IO rate of 0.19% you have such a small savings pot and no better structured repayment plan in place than ER.

Not judging, but I can see where their coming from and i'm on your team...

There may well be good reasons and it's none of our business, but it doesn't look good on paper and they don't really care much - maybe it's that great rate having a counter effect on their decision too. Not much in it for them really.

From a commercial point of view, I'm suprised they have considered it at all and bonus points to them for trying for so long, if you see what I mean.

Do you have any other options short term? family etc that you can repay in 5years time?A personal loan?

Thrugelmir

How long ago did you start discussing the matter? By doing nothing for a while Barclays may feel that you are simply procrastinating.

One obvious flaw with your suggestion. Is that Barclays are unlikely to extend the mortgage on your current level of interest. The net effect will be to increase your outgoings and reduce your ability to add to your savings.

striker44

Barclay's approached me 2007 and offered to lend me as much as I wanted at 1/2 over base. At that time I was worth nearly 1/2 million so no probs about repaying at term end - we took 55k and added large extension. When I looked at situation in 2014 I saw would not be in a position to repay on maturity due to loosing out in crash. Approached them then requesting extension to planned retirement date and it has been going on until last week when verbally they said would not agree to proposal; this after telling me that they would put my proposal to their senior management team for a decision.

From what has been said, looks like I have no alternative than to sell and move, which after over 25 years will be difficult.

Trying_to_be_good

They may offer you a new mortgage on a higher interest rate, on a repayment basis, based on your affordability. It's not in their interests to continue to lend to you at +0.19% as they're losing money.

Have you asked about a new mortgage, i.e. what they can do for you, rather than what you wanted them to do? You have five years to save as much as possible if you want to stay in the house and reduce the level of new borrowing you'll need.

Jhoney_2

Trying_to_be_good wrote: »

They may offer you a new mortgage on a higher interest rate, on a repayment basis, based on your affordability. It's not in their interests to continue to lend to you at +0.19% as they're losing money.

Have you asked about a new mortgage, i.e. what they can do for you, rather than what you wanted them to do? You have five years to save as much as possible if you want to stay in the house and reduce the level of new borrowing you'll need.

My understanding is that the term is ending this year...

Jhoney_2

striker44 wrote: »

Barclay's approached me 2007 and offered to lend me as much as I wanted at 1/2 over base. At that time I was worth nearly 1/2 million so no probs about repaying at term end - we took 55k and added large extension. When I looked at situation in 2014 I saw would not be in a position to repay on maturity due to loosing out in crash. Approached them then requesting extension to planned retirement date and it has been going on until last week when verbally they said would not agree to proposal; this after telling me that they would put my proposal to their senior management team for a decision.

From what has been said, looks like I have no alternative than to sell and move, which after over 25 years will be difficult.

Genuinely sorry to hear that.

Is there no family to assist short term? Kids or your siblings?