2nd Attempt - Shared Ownership Remortgage / Additional Borrowing

TOOTHACHE

Hi - Obviously could cut and paste on first attempt!
My 2yr fix came to and end 03.04.08. Was on 4.69%. I own 50% of a shared ownership property valued at £210k for the full 100% value.
In two years the property has increased in value by about £5k (was overpriced to start with).
I have been looking into new fixed rate deals with the possibility of additional borrowing to clear my other halfs car finance and my credit card. These aren't un-affordable 'debts' just thought that we would get rid of them now due to the uncertain financial market. In two years we have reduced our mortgage balance by £35k due to inheritance and repayments at a low rate.
The Housing Assc refused additional borrowing at first until I asked for a copy of the contract where it says this is not allowed, they then said (without the contract) that we could be allowed as we have reduced our mortgage by so much! (I guess it never was in the contract...or it isn't deemed as fair...)
We found a deal with Halifax which was open to S/O properties (limited to mortgage choices being S/O), 3yr fix, first yr 3.99% and 2nd & 3rd year 5.99%, so average of 5.32 (which is pretty good) with £995 arrangement fee. Halifax said they would offer additional borrowing for debt consolidation on S/O property. So we accepted and they credit searched us etc... Then I telephone 3 weeks later to get an update and I am told they have refused the add borrowing. The reason - they do not lend more than is required on S/O properties.
As you can imagine I went mental, having been told it would be ok and having the credit search done (plus the fact every mortgage deal under the sun has vanished in the past 4 weeks) and how can they now turn around and say this? They were very apologetic but that is as far as it went. The representative I spoke to cannot remember which manager cleared the add borrowing either... hmmm.....
My question - I can see that this is still prob the best deal out there (since applying it has been pulled - but we are safe for 6mths), but I am very miffed with the Halifax for not getting the additional borrowing bit right to start with as this was a major factor which I did stress straight away before I even discussed rates.
Would they consider 'compensation' by reducing the arrangement fee (I see that as fair) OR can anyone suggest a provider that will allow add borrowing on S/O for debt consolidation? There must be someone out there and our H/A have agreed to allow us to borrow extra. After all we have cleared £35k so why shouldn't I take out a portion of my inheritance?
Thank you.

Trollfever

Crunch.............

TOOTHACHE

pardon....?

beecher

I doubt you'd get compensation - banks are changing their terms daily and what someone says is acceptable one day may not be acceptable by the time the paperwork arrives with the person who makes the decision.

I don't think it is helpful to think of the overpayments as 'your inheritance' as you've spent it now, rather than banked it.

Since your debts aren't unaffordable maybe it is best to just move on and be thankful that you aren't in negative equity, and able to get the deal you got?

TOOTHACHE

I think it was just a complete mess up by them start to finish. I couldn't have made it more clear what I wanted and what I was asking.

The debts are affordable, don't even notice them, but there is nothing wrong with wanting rid of them and living a lot more comfortably, especially in todays climate.

I don't see the money as my inheritance any more, it is in my property, BUT unlike people with a normal mortgage we cannot take the extra out and that is something neither of us were aware of (I wouldn't have bothered putting it in if I knew that!).

Still be interesting if anyone knows of a lender who would...

beecher

I think the sooner we move away from thinking that mortgage equity withdrawal is anything other than adding to debt the better. If you hadn't put that money in, you'd be struggling to come off the SVR as your LTV would've been too low.

Best to just move on I think - adding debts onto a mortgage is crazy in my opinion as you're paying it off for years and so pay far more in interest payments.

TOOTHACHE

A mortgage is a debt, but an 'accpetable debt'. We are really not bothered about adding to the mortgage, since we bought the S/O property two years ago my partners wage has increased by £15k per annum and mine by £6k. If we could find a property we liked we would buy it, we can borrow around £250k on our earnings plus what equity we have so a £78k mortgage is not really an issue.
We switched the deal to interest only (just borrowing £68k), which meant repayments of £220 a month for year one as we are not intending to stay (plus that means a saving of £270 a month) and my parents are keen to help buy us a family home as they have money to invest. Dad is just waiting for prices to hit rock bottom and 'bag a bargain' which he did in the 90's.
Personally all the grief we have had one way or another with S/O I would never recommend it to anyone. Worse than having a landlord and so many little clauses in everything you do.

Conrad

Tooth, I keep adding posts in which I share my reservations about Shared Ownership. Yours is yet another illustration of the complexity people encounter.

Re the Halifax;
As ever what has happened here is 'real life' has met an adviser that has insufficient skills and fore thought to recognise your deal was'nt a goer.
I think you ought to complain otherwise this sought of sloppy dealing (I see it every day) just continues unchecked.

The staff member you dealt with simply was'nt sufficiently thorough, so complain and keep complaining. I'm persoanlly sick n tired of the sloppiness I encounter every day with regards to lenders and IT people (IT people are so out of touch with the real world)

TOOTHACHE

The lady I dealt with has been very apologetic, she actually said she would totally understand if we wished to log a formal complaint.
I did consider it but it wont reverse the decision and I guess she now knows for next time when she gets a S/O application.
TBH I cannot be bothered with anymore hassle from mortgage providers, next time I need to speak to anyone will be 3yrs! Remortgaging has been a complete nightmare. I guess that is beacuse S/O is so complicated.
At the end of the day S/O got us on the property ladder at the very least. I live in Surrey and as you know prices here are massive so we have that to be greatful for. But being S/O you will never come out a 'winner', they always do, but it is a start.
Perhaps if things do get worse with property (having read today something about biggest drop in 30 years!), we can snap up the rest of our lovely conversion at a bargain price.
I certainly wouldn't recommend it to anyone though unless you want a lot of headaches along the way.
I guess we can sit tight an be happy knowing that for the next year our mortgage is only £220pcm and only marginally more years 2/3..which is a lot more than most are.