Advice - make this make sense for me pls

ukman2012

I've always believed that within our banking system more information is collected about an individual. 

I've got my mortgage with a high street bank, my current outstanding amount is under 63k, my house current valued at 220k.

Recently approached my mortgage company about borrowing more, 45k to be precise to do a loft conversion. The high street mortgage company denied saying I failed on credit check, but what it strange to me is that the same bank wants to loan me and have approved a loan for 50k, which I have not taken and ask them as to why the loan was approved and not the extra borrowing, the system would rather see me fail done succeed with an asset. Why? 

Brie

It may be because of your age and the length of the mortgage versus the time they are offering the loan for.

If you are (for instance) 50 and have 10 years left on your mortgage they might think that adding £45k to the mortgage might mean extending the term to 15 years.  But if you had a loan to be repaid over 7 years then they should get all their money back well before you reach retirement age.  

It's also because the mortgage department and the part of the bank that deals with loans are separate entities even if they work under the same banner.  

And frankly I get it that it seems better to have smaller payments over a longer time as that is more affordable but there's a lot about banking that is not logical.  This is not helped by the fact that the mortgage interest is likely to be less than that for a loan.

ACG

The way you are assessed is different and they each have their own risk profiles. 

Loans and credit cards are usually taking into account your credit score with a given credit agency where as with a mortgage they usually use their own scoring system. 

A loan will probably be at a higher interest rate which means they can probably take more risk because the profit margins are higher.