Need to extend mortgage - refused as repaying family - advice pls

beebuzz168

Apologies for long title!

I have just had a discussion with Yorkshire Building Society about borrowing more in an existing mortgage the reason being to repay family who have helped with funding an extension that is now nearly complete.

It has been refused immediately due to being consolidation of debts. Apparently if I'd asked to borrow to fund the extension upfront that would have been considered but because we borrowed the money from my mum first they won't even consider our application.

I'm fuming & frustrated, mostly with myself for not understanding the process.

What are our options now? We really need to be able to repay this money. We have about 3 years left on a fixed term mortgage so assume we can't move the whole lot. Can we take out additional mortgage with another provider?

Any advice gratefully received.

If relevant, we have an existing mortgage of about £195k, asked to borrow an additional £36k and the house is worth around £500k.

ACG

You could move to a new lender but it will incur early repayment charges, with 3 years remaining that would probably be 3% of the remaining balance (although could be more or less, you should check with YBS).

An alternative would be a secured loan, then in 3 years remortgage and wrap the 2 up in to a new mortgage?

Have a chat with a broker, they can go through your options and costs.

minimike2

If they do not allow for consolidation of debt then one option is to move to another lender and pay your early repayment charges to come out of your fixed rate.

Lesson learnt that these things should be checked first - Why would you borrow a substantial sum of money before checking that you had the ability to be able to repay it in the way you intended?

It may sound perverse but each lender has their own criteria on what they will and will not lend for. YBS are particularly fussy.

You could complain, but it will get you nowhere if it is something they do not allow for in their policy.

On the plus side as long as your affordability and credit history stack up ok then there is no reason why you shouldn't be able to get a mortgage with another lender to allow you do get the extra cash, or as ACG says you could always look at the loan option too.

amnblog

As stated, there are other ways to manage this.

If you are locked into your current lender it may not be practical to remortgage to a new lender now.

You can raise what you need in extra funds from a second lender now and remortgage the lot when the time is right, kissing goodbye to your current lender.

A broker will sort you out no problem.