Help with Mortgage Prisoner Please

harrycat03

Hello,
I'm trying to help my mother-in-law get a cheaper mortgage rate but having no joy. She has a circa 140k mortgage on 4.15% from Mortgages Plc. The property is worth circa 185k but she only earns around 18k pa. She got a self cert years ago and is now struggling. I know she would not fit any lending criteria and I phoned up Mortgages Plc to see about a better rate but they said they only off their SVR.

They're a weird company that deals with non-compliant mortgages apparently. I had an issue myself porting my first direct offset lifetime tracker to a more expensive property and it was only when I quoted the provisional arrangements for existing lenders that they acquiesced but they still gave me 70k less than I was borrowing on a smaller property. Anyway the reason I mention that is because I thought if Mortgages Plc did offer cheaper rates she might be able to get one through these arrangements.

Not sure if anyone know of any other way for her to find a cheaper rate with such low earnings? Any help is appreciated. Harry

SavingSteve

I presume she self certed a higher income than she had at the time, so harsh as it may sound she has to live with the consequences of her fraudulent mortgage application.

Realistically she can't afford that house, she needs to down size. Even if her application wasn't inaccurate at the time her circumstances have changed now, so downsizing still applies.

No lender will offer her 140k on an 18k salary.

OrlaAS

Hello Harry,

Very difficult situation.

Unfortunately as i am sure you are aware mortgage regulations have changed massively since self cert days. The maximum your mother in law can expect to borrow would be 5x her income. Maximum of £90,000, there are some lenders that do 5.5x income but this is a rarity usually for very high earners.

Lenders will also have to factor in your mother in laws age, unless she is able to show a proof of pension income most lenders will only look to lend up till the age of retirement (usually 75).Which may also affect affordability.

A option may well to be to downsize, but depending on the area and other financial arrangements this may well not be a viable option.

Sorry i can't give a more positive response.
orla

kingstreet

harrycat03 wrote: »

I quoted the provisional arrangements for existing lenders

Presumably you mean the transitional arrangements from the FSA review in October 2012?

These were superceded in April 2014 when the MMR-proper was introduced and have largely been ignored by lenders, before and since.

amnblog

We pushed a few of these through earlier this year but the Mortgage Credit Directive killed the final avenues available.

Does she have the added complication of being on interest only?