Declined for addtional borrowing - the amount is lwoer than Original Mortgage

scoops82

Hi


Just looking for some advice to assess my options if any.
I rang my current mortgage provider and asked about what my limit would be if I was to look at moving house. I am 1 year into a 5 year fix.


After a quick affordability check they said they would offer £110k ( or £25k less than my current mortgage ) - I found this odd as my situation ahs not changed since 1 year ago.


The mortgage is in my name only yet I live with my partner (I think her credit report would be quite ropey but mine should be excellent, and our 2 year old son.


House Value = £230k
O/S Mortgage = £135k
Plus additional deposit = £30k (From current BTL property which could be sold if required)
Salary = £34k


My questions would be


1 - Is there any obvious reason why now they would offer £30k less than the same point last year? At that point they offered 4.5 my salary.
2 - Would my only option be to pay the ERC and look for a provider that would offer more?
3 - I was assuming I would get 4.5 X Salary, + Equity from house and Equity from BTL = £275k ish . Is that unrealistic?


Any help or advice would be usefull.

Thrugelmir

When you say equity from the BTL. Do you mean increasing your borrowing against the BTL property?

foxy-stoat

Maybe your current lender's criteria has changed in some way or they don't want to lend you 4.5 times income.

scoops82

I mean the £30k equity is from a BTL I could selll for £95k with an OS mortgage of £65k

haras_nosirrah

A lot of lenders calculators were updated in May with new ons figures. With some it has made a huge difference (had a nwide aip for 160k and after change was reduced to 145k)

scoops82

Okay, it’s no major deal as it was just a thought so I checked out the limit. I was surprised it was lower though.

I was intrigued to know if the criteria above would qualify for a mortgage for more than what we have currently. I have clean credit and good credit scores and no finance loans or debt.

Thrugelmir

scoops82 wrote: »

I mean the £30k equity is from a BTL I could selll for £95k with an OS mortgage of £65k

Underwriter will focus on the £65k liability. Rather than the unrealised equity. With either no tenant in situ or a non paying tenant the property would be a drain on your cashflow. Lenders are required to act responsibly and prudently.

scoops82

It is currently tenanted so for this purpose I was just including the £30k as additional cash deposit. I wasnt asked any questions about this property during the affordability questions

Jmaho

The underwriter would ignore the background BTL and class it as self funding

[Deleted User]

Jmaho wrote: »

The underwriter would ignore the background BTL and class it as self funding

Interesting blanket statement applied to all lenders in the industry there.

Certainly the existing property being rented out will be taken in to account. Some will say its self financing, some wont. Depends on their own calculations.

I would probably try have someone else go through your situation and run the numbers and see what comes out. Its amazing how many stories you hear of 2 brokers approaching the same lender and getting different loan amounts. It might be that the person you spoke to is interpreting the numbers incorrectly, or it may be perfectly legit.
*Most* lenders allow brokers to do porting applications as well so maybe see someone else and get another opinion.