No wonder mortgage applications are falling in number

Discussion in 'Finance, Property, Law' started by Sympathetic_Reaction, Mar 11, 2011.

Welcome to the Army Rumour Service, ARRSE

The UK's largest and busiest UNofficial military website.

The heart of the site is the forum area, including:

  1. Sympathetic_Reaction

    Sympathetic_Reaction LE Book Reviewer

    Okay, I've just tried to add a chunk to my mortgage to extend the house a bit. I've been a customer with the same mortgage lender for 10 years, I have never missed a repayment and the past 5 years have been overpaying each month.

    So I think, this shouldn't be too bad, quick phonecall nice chat 'Of course Mr S_R we'd be delighted to lend you some more money at a sensible interest rate.

    Oh no.....

    Firstly they tell me my house isn't worth what I payed for it - ignoring the fact i bought a shell and have gutted and re-built it, they 'can't take that into account on the system'

    They then tell me I can only have 85% of loan to that's less than I want to start with.

    I also have to take all my overpayments back out and use that first before they will give me extra.

    Then we hit the crux...rates.

    Basically the cheapest I can get is 4.79% - for which I have to pay an arrangement fee of £999, if I want one without an arrangement fee then it is going to be 6.49%. So ignoring the fact that this is significantly over the interest rate I get on savings (from the same provider) it is also above thier Standard Mortgage rate (3.99%) so i'm paying to take out a mortgage at a higher rate than the mortgage will revert to after the fixed period...someone explain that one to me.

    I have no idea how first time buyer have any chance if a current customer struggles.

  2. I sympathise. We're currently renting, while building-up as big a deposit as possible before re-entering the home-ownership game. It might be this year, more probably next. Then again, moving to France is also a possibility.
  3. You're quite right. We are saving for a house deposit at the moment, not easy to save 15-20%. I would have thought you,as a current customer, over paying every month would have been valued, I guess not.
  4. I'm a first time buyer but only able to do so now that I am about to demob. Initially looking to rent but discovered it is a lot cheaper to buy! I came a cross a sterling Mortgage advisor (ex forces) who got us a very good deal (due to my large gratuity which equals a not so great 29% deposit!). One thing I did notice was the estate agents were all over us like a rash with most sellers in slashing chunks off to try and get our interest. Without the lump sum we would of been screwed and heading to social housing!
  5. The trouble is that a customer who over-pays makes for less profit in the long term. The best customer for a lender is one who can be relied on to make the minimum payments.
  6. halifax by any chance?
  7. Would having your house valued by an independant Chartered Surveyor for submission be recognised/accepted by your lender?

    I'm moving home and as I'm only laying down 17% deposit/equity for the new house (I'm upgrading consideribly) I get quite a shite interest rate (4.99%). I did look at adding more equity and not having any savings as back-up but all it meant was approx. 0.4% which equates to just over £100 a month I'll be saving. I decied to keep the savings and take the higher rate.

    TBH I found it quite easy to get a mortgage (in principle only) from several lenders. The worse for rates was LloydsTSB who I've banked with for 25+ years, and the lowest, whom for ease on my part and whom I'm going with, is Santander.

    The arrangement fee thing is just ****ing rubbing salt into the wounds when you work out how much they're robbing you for interest.
    Bank of England interest rate - 0.5%
    Robbing ****ing banks interest rate - 4+%
  8. What Fat_Cav has said is very sensible and for the sake of what a surveyor would charge you , it may well be worth while. I've had experience of lenders typing some figures into their systems and coming up with valuations and of course they don't take into account major works or extensions.

    We are currently paying 2.5% with Nationwide, but I dread the base rate going up.
  9. S_R,

    You would be better off looking around and re-mortgaging completely. Your bank doesn't want your business! If you have sufficient savings, you might consider using them to increase your deposit. Don't destroy your emergency cushion, but try to improve your equity in the house.


    The Bank of England might be holding short-term interest rates at 0.5% but 10-15 year interest rates, which aren't controlled by the BoE, are rated at more than 4%. 5 year money is about 3-3.5% (which means you and I would be quoted about 4-4.5%).

    The market reckons the BoE will increase rates in May, probably by 0.25%. The market also expects the ECB to raise rates by the same amount in April.

  10. Sympathetic_Reaction

    Sympathetic_Reaction LE Book Reviewer

    I am thinking about getting a valuation, mainly as I would want to know whether the extension is going to add to the house what it is costing. Something to think about.
  11. Sympathetic_Reaction

    Sympathetic_Reaction LE Book Reviewer

    Savings are an option, I've got enough to play with but it was going to be my contingency pot.

    I can't leave the current providor, still got 5 years on a fixed rate so the buyout charge kills that idea off...also the rate i have with them isn't bad.

    All ideas but just annoyed at the fact that customer loyalty isn't worth poo anymore...

  12. I can understand completely! I too bought a shell and have just about finished total renovation. However, I was tied into a 7.29% interest rate for 3 years. As I now have suitable LTV I have just managed a remortgage in principle with the Nat West at 4.09%. Even with the redemption penalty, I have been able to increase the amount I wanted to borrow(to incorporate the redemption penalty), reduce the term and save £150 per month. However, my problem was salary multiples. Even though I have never missed a payment, etc and I would be reducing the amount paid each month, no one would touch me.

    One word is though that the mortgage companies do not take into account a valuation from an estate agent. The onus on you is to prove what other properties in the area are worth (so they have told me when I asked the question regarding LTV). I will request they come out to visit if the computer says no.

    And yes, my current mortgage is with Halifax.