Does anybody know why are lenders refusing to allow you porting your mortgage?

kaushikThakrar

Why a Building society refuse to port our mortgage. When I call them they say it is potable mortgage with a small print?
Can the lender refuse us to port your mortgage making us a prisoner?

Sparklestar1127

kaushikThakrar said:

Why is Coventry Building society refusing us to port our mortgage. When I call them they say it is potable mortgage with a small print?
My wife and I have a mortgage with Coventry Building Society. We have been with them for a while and now we are thinking of moving and want to port our existing mortgage to a new place. It works out the amount we want to borrow is only 20% of the value (outstanding mortgage = 118K) of the property and we are paying 80% of the value of the house. I am now self employed for past 2-3 years and am a Director of a limited company owning 80% of the business and my wife owns the remaining 20%. Our company provides IT services and the turnover our the past years have been 2018 - £85K, 2019- £72K and this year £98K. We work on cash basis and take minimum salary and take enough dividends ensuring our cash balance is constant of £50K in the business at any given time. We also have other sources of income (£42K per year) as rental income on outstanding buy to let mortgages of £40K. I do also have another mortgage of £100K for our sea side home.
The only issue I can see is I am 63 years old and my wife is slightly younger. But we have our personal pensions worth £250K each and have paid full NI contribution which will give me around 10K a year and similar y for my wife.
Can the lender refuse us to port your mortgage making us a prisoner?

They can refuse to port yes, it’s basically a new application and you still need to pass their checks and criteria. Is there an ERC to leave? 

kaushikThakrar

There is no ERC. We can leave anytime without any penalties. But the only thing I am afraid of is will other lenders think the same way!

kaushikThakrar

In regards to the criteria I have no idea how they come to a conclusion that we can't afford the payment. The new payment will be actually be less because they have new promotion for 2 year fixed is1% lower interest rate.

[Deleted User]

Porting is only allowed if you qualify for a new mortgage with them.  Based on strict lending criteria at the moment you don't qualify for a new mortgage with them

Some lenders just aren't interested in doing any business with self employed at the moment.  It's their money their rules unfortunately and nothing to do with porting 

Just be glad you don't have a large penalty to leave them. Some aren't so lucky.

But melodramatic saying you are a prisoner though.  They aren't forcing you to stay with them. The opposite actually 

kaushikThakrar

I am stuck from moving to new home and want be able to move at all if all the lenders think the same way. Like you say no lenders want to give self employed people a mortgages. Hence I am prisoner to stay with them. They are therefore indirectly forcing me to stay with them aren't they? 

[Deleted User]

There are 70-100 lenders. They don't all think the same way or we would only need 1 lender.  
Some are good for certain types of cases and at the moment there are good lenders for self employed and bad/awkward lenders for self employed.

Get a broker and get advice on the best lender for your circumstances 

kaushikThakrar

If I don't move to a new place at all then they don't have any issues.  How does that logic work? In fact the new place I am buying I am putting in additional 60K from our savings. So we are only asking for 20% mortgage and 80% is the equity we would have in the new place. Where is their risk?

[Deleted User]

The logic works because you have an existing mortgage. They can't just take that away from you.

That doesn't mean they would want to accept you now.

kaushikThakrar

How would I find broker? I am bit scared going through Internet to find a broker as I don't know who are genuine and who are not.
Like we found out with our solicitors they are genuine but lenders didn't recognise them.

kaushikThakrar

One lesson we learnt was ask your lender who are in their panel list before appointing a solicitor.