BTL Remortgage declined

Trillionaire

Hello

Please be nice to me as I'm a newbie (though a long time lurker):D .

My husband and I have a BTL mortgage with Mortgage Express. Our fixed rate was ending on the 31/04/08 so I decided to remortgage to another company who had a better fixed rate, plus when the fixed rate had finished the rate would have been BBR + 1.??% which was lower than Mortgage Express. Mortage Express wanted us to tie in with them for another 2 years but because the rate with the new company was favouably lower and the end rate also lower, we decided to go with the new company.

This new mortgage company did the valuation around the beginning of March but have only told us today that they have declined us because the surveyor has said the property 'is not readily saleable i.e. there is not much demand for this type of property.' The property has tenants in and the rent is more than 125% of the mortgage payment.

The % percentage loan we were asking was 79% of LTV.

My gripe is

1. We paid £225 for the val report
2. £75 for Sols fees
3. £??? deeds release fee from Mortgage Express
4. Time and effort and constant chasing for an mortgage offer:mad:

I really need your help writing a letter to the mortgage company who declined us because I want them to reimburse our fees paid out (all the above) plus an ex-gratia because I feel sooooooooooo upset with the time wasted:mad:

Please help me write an effective letter so that we can get our money back.

Please note that there is absolutely nothing wrong with the propery other than it is 2 bedroomed flat - apparently no one can sell them for love nor money (except we're not wanting to sell).

Please, please help.

UK007BullDog

When you sent in the application you might have seen the small print which stated that some or all of the fees are nonrefundable.

However as they declined you you might have a comeback on the product fee, but that is about it.

Even though you have tennants in there now, if they were to move out the surveyer thinks you might have a hard time finding a new tennant. Is the property unusual in any way?

Call the surveyor and ask him about his comments. Most lenders want to have at least 25% equity in a BTL property these days.

I would ask them why before you go in guns blazing. maybe things can be worked out. Ask for a seniour underwriter to review the case and maybe for an extra cost send out another surveyor, or if you have savings reduce the borrowing.

Trillionaire

Thanks for your response Bulldog.

I went through a mortgage broker who is upset, obviously because he wont get paid. I think the mortgage company have spoken to the surveyor twice. The property is easily rentable as there are a lot of Polish immigrants needing housing plus it's easily accesible for the local univeristy and also on the direct bus route to the City Centre about 2 miles away.

The reason it was declined is because of the surveyors comments on the valuation report and apparently the mortgage company has spoken to him twice about his comments to clarify them.

I think my real :mad: point is that if they had declined it within a week or even 2 weeks of receiving the val report I could of stayed fixed with Mortgage Express and that's why I want to persue some compensation because it's just not fair

Conrad

The reason for a surveyor deeming a property to have limited demand is usually where its ex - local stock.

Trillionaire

The property is not ex-social housing - however, according to the surveyor (who I happened to show around and speak to on the day of the valuation) it was built by an housing association for part-buy part-rent or outright buy. It belonged to my fil who I believe purchased it outright with a mortgage from the building society many moons ago.

Trillionaire

I suppose really this means that noone is going to help me write my complaint letter

Conrad

I always check the property up - front where there is a reasonable likelyhood of valuation problems - and I always take steps to discuss with the valuers when its an ex - council property.

The broker has some responsibility here. I suspect he lack experience otherwise he would have learned this lesson long ago.

I often struggle against newer brokers in my area because they give potential clients more positive (unrealistic) expectations.

Tiddler_2

The unfortunate thing is that mortgage companies have taken a step back 5 years or so, and underwriters/approvers are now looking for reasons not to do a mortgage, rather than ways to do it.

The fact that the valuer has said that the properties are not selling very well is a big influence, because the mortgage company are viewing it from the perspective of what would happen if they were to repossess the property.

Trillionaire

Tiddler I pressed your 'thanks' button.

Ok. Should we try mortgage express again? If 'yes' should I tell them that the property was declined ......... plus now our fixed rate is finished ... maybe we missed that boat.

Tiddler_2

Obviously you have nothing to lose by sending the letter - which mortgage company was it?

The only real point of complaint is the length of time it has taken from the valuer going out to getting the decline decision. 6/7 weeks is disgraceful for that even in a timescale where some lenders are taking 3 weeks to look at a piece of post.

Whilst your broker is now not being paid for the mortgage, there may be times when you want to use him again, so it is in his interest to help you with the letter. He should have also been chasing trhe mortgage company weeks ago to find out what was happening with the valuation (and that it was ok!) I am fortunate that I have someone to do that for me, but the broker should be doing that for you

UK007BullDog

Might help to call up the surveyor and ask which BTL lenders do lend on the property type you have in that area.