Cannot remortgage with same lender due spray foam insulation

jai_aus

I purchased a property two years ago and my current mortgage term is coming to an end.  I received a good offer through my current lender. However, after valuation, my lender told me that the property is not mortgageable as it has spray foam in the roof. I am not sure what my choices are or what can I do. The same lender gave me the mortgage two years ago and is now declining to extend the offer.  

I am worried sick on what to do?

Any advice would be great.

Regards,
Jay

regency_man

You'd have to give a bit more information - when you say your 'term' is coming to an end, do you mean your 'initial fixed rate' on a multi-year repayment mortgage is ending?  Or that your full term on an interest-only mortgage is ending?

regency_man

I am going to assume you mean the former, as an interest only mortgage for such a short period would be highly unusual.

First, don't panic, it's only your initial fixed rate deal that is ending, your existing mortgage is not affected.  You will need to plan financially to pay the higher monthly repayment at whatever standard rate your mortgage reverts to.  You have time do more research into this.  This seems a recent issue and there is not much information I could find, but according to this article, https://www.mortgagesolutions.co.uk/news/2021/12/21/rpsa-warns-250000-homes-could-be-unmortgageable-due-to-spray-foam-insulation/ the issue is significant and I'm sorry you're in this situation.

Your options then are:

1. Keep looking, you might be able to find a specialist lender who will provide a mortgage.

2. Carry on with your current mortgage, if you can afford the higher repayments.

3. Have the spray foam removed and request your lender to re-assess the property.

jai_aus

Thank you so much @regency_man. Yes, it's my initial fixed term coming to an end. 

jai_aus

I am hoping I don't have to change the whole roof.

penners324

Find out who installed the insulation and get them to remove it (very unlikely this will succeed but worth trying). Also contact your building insurance over it as well.

MWT

jai_aus said:

However, after valuation, my lender told me that the property is not mortgageable as it has spray foam in the roof.

What triggered the valuation?

Were you trying to increase the borrowing?

With most lenders you would have had a number of different products available to choose from without the need for the valuation if you were not trying to change the term or the amount borrowed...

jai_aus

penners324 said:

Find out who installed the insulation and get them to remove it (very unlikely this will succeed but worth trying). Also contact your building insurance over it as well.

I don't know who installed it. It was here when i purchased.

jai_aus

MWT said:

jai_aus said:

However, after valuation, my lender told me that the property is not mortgageable as it has spray foam in the roof.

What triggered the valuation?

Were you trying to increase the borrowing?

With most lenders you would have had a number of different products available to choose from without the need for the valuation if you were not trying to change the term or the amount borrowed...

I went through to a broker and made a request to change to a different product. I was not trying to borrow more so not sure what triggered the valuation.  I selected a 5 year fixed deal instead on 2 years that i am on now.

MWT

You didn't say which lender, but I'd be inclined to ask your broker what triggered the revaluation, as even with the broker in the loop, there should have been options in most cases that didn't need a valuation, so I'd have expected them to talk to you about those before triggering a new valuation...

It may be a specific issue with the lender and the product you had of course so there may be a perfectly sensible explanation...

Sistergold

Does it mean you can not do the product switch with same lender? I think like others say you might want to get a company which can remove the spray form as if you get a specialist lender this will continue to cause problems when remortgaging or selling. Next time best do an online product switch quote with your then current lender see what they offer you then if you want or shop around tell your broker not to send an application to the lender you are with at that time so as not to “rock the boat?” Your current lender should always be the one to fall back on once you can not get a good deal elsewhere! Good luck