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'Can't afford lower repayments' rejection
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manorfarmdave
Posts: 3 Newbie
Apologies if this has been covered before, but has anyone challenged or complained about being rejected for a new loan from an existing lender and been told you can't afford the lower repayments?
Having lost a job I'd had for 23 years, and being in my 60's I embarked on a mission to drastically reduce my monthly outgoings as I knew my income would take a dent even if I were able to get back into full time employment. My main mortgage company gave me a new 2 year fixed deal which reduced my monthly payments by £150pm (I had been on SVR for a few months thinking we would have to sell up and go rented). I then approached my 2nd mortgage lender and asked if they would do a similar deal (£36.5k @ 17.9 % = £687pm taken out in 2015 - long story). Initially they agreed (APR 8.9% - £480 - same term) and we went through the application process. After a few weeks, their head of lending contacted me to say that I failed the affordability criteria, even though I wasn't borrowing more or changing the term. He explained that as they were regulated differently from Banks & Building Societies and can't just renew agreements with different interest rates. I took this at face value and left it that I would perhaps re-apply in a year when I'd paid more off my main mortgage (approx £900pm capital reduction) to improve LVR and would be eligible for state pension (to boost income figures). Thinking on about it it now though it now feels like I've been set up to keep me paying higher repayments and the rejection reasons have no logic behind them.
Has anyone had any success in challenging this nonsense.? I would have thought affordability rules were intended for new lending and not to the detriment of existing lenders.
I'd be grateful for anyone's experiences.
Having lost a job I'd had for 23 years, and being in my 60's I embarked on a mission to drastically reduce my monthly outgoings as I knew my income would take a dent even if I were able to get back into full time employment. My main mortgage company gave me a new 2 year fixed deal which reduced my monthly payments by £150pm (I had been on SVR for a few months thinking we would have to sell up and go rented). I then approached my 2nd mortgage lender and asked if they would do a similar deal (£36.5k @ 17.9 % = £687pm taken out in 2015 - long story). Initially they agreed (APR 8.9% - £480 - same term) and we went through the application process. After a few weeks, their head of lending contacted me to say that I failed the affordability criteria, even though I wasn't borrowing more or changing the term. He explained that as they were regulated differently from Banks & Building Societies and can't just renew agreements with different interest rates. I took this at face value and left it that I would perhaps re-apply in a year when I'd paid more off my main mortgage (approx £900pm capital reduction) to improve LVR and would be eligible for state pension (to boost income figures). Thinking on about it it now though it now feels like I've been set up to keep me paying higher repayments and the rejection reasons have no logic behind them.
Has anyone had any success in challenging this nonsense.? I would have thought affordability rules were intended for new lending and not to the detriment of existing lenders.
I'd be grateful for anyone's experiences.
0
Comments
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Hi,
Unfortunately this is a thing that happens and Martin Lewis has campaigned about it.
Check out https://www.moneysavingexpert.com/news/mortgages/2016/06/i-was-a-mortgage-prisoner-but-escaped-thanks-to-mse-and-saved-3600
Tlc0
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