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Mortgage Lending Criteria

We are relocating in January after selling our property for £169k. We have had an offer of £183k accepted on a house.

We have £34.5k owing on our mortgage and would hope to borrow another £33.5k making a total of £68k. £10 - 15k wil allow us to improve the property also. This is against my annual salary of £25k gross so fits within the desired multiple scale etc.

My credit rating is excellent with no CCJ's or anything else. We are currently with the Yorkshire BS and have had a mortgage with them on two propertied since 1997. Over the last two years we have overpaid our mortgage every month by approximately £200 on average and £30k overpayments in total during this period.

Provisional meeting with advisor on Saturday seemed to suggest everything was fine and credit scoring would be done today only for them to ring me to say that they were not happy about the afct I would keep my existing job until I found suitable employment in the new locality. This will mean me commuting for 2 hours on a mOnday morning and returning on Friday afternoon. They consider that there is a risk that if I find new employment it will not necessarily be at the same salary and as thus does not meet the normal lending criteria.

Obviously, I will only leave my present job working for local government when I achieve a move on a similar salary (may have an interview line up shortly) which I am confident about. Surely I have more to lose than them i.e. 2/3rds to 1/3rd.

They mentioned that all lenders would havethe same policy but when I approached the Newcastle BS and the Nationwide they both had no probelms with me keeping my existing job as they can only make a judjement on the situation as it is now and not what might happen int he future although I appreciate you have to decalre anything may affect your earnings inthe near future.

After being a very good loyal customer of the YBS I feel a little agrieved to be honest and am seriously contemplating taking my business elsewhere, early repayment penalty or not.

Surely not everyone who has a mortgage lives and works in the same village and who knows what the future holds for any of us job wise.

Anybody had a similar experiences or have a view. Am I missing something here?

Ray L

Reply to
Ray L
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In message , Ray L writes

Rubbish, as you next words prove.

I think this is one of those cases where a local *manager* is thinking too much. Tell them that other lenders dont take that view at all and appeal to their better judgement. Remind them of the good loan to value ratio and low income multiple (most lenders would gladly lend you at least £87.5k) and that there was nothing to have stopped you changing to a lower paid job whilst you were in your current house. Ask them if they want your business or not.

What to do next depends on how much the early redemption penalty is.

Reply to
john boyle

My sentiments exactly John. The YBS are going to reassess mya pplication today and yes I will be putting it to them inno uncertain terms as you say.

The Newcastle are contacting me today also and at this stage I haven't said anything about the YBS looking on my application unfavourably just in case I can negotiate something on the £2k redemption penalty.

I'm sure it will all come good just a kick in the teeth when we thought everything was going so well. Must admit I thought the guy at HQ must be new and trying to make an impression but if he carries on they will have no business at all. The whole thing has left a sour taste.

Can anybody recommend a good lender other than the Newcastle BS. We are also looking for possibly a 3 year fixed or something of that ilk if there are any good deals out there. Currently on 5.24% fixed until Nov 2008 with YBS.

Thanks again John

Ray L

Reply to
Ray L

Application refused as YBS criteria does not allow even for only £49k mortgage on a £183k purchase.

Newcastle senior underwriter as approved over the phone just to send the application form in. Managed to get a better fixed rate deal at

5.1% until Jan 2008 but will have the dreaded redemption penalty to pay. Although it's not all one way traffic. I'll be withdrawing all my savings from the YBS too!!!!!!!!!!!!!!

Still can't get my head round it.

Reply to
Ray L

If I understand correctly, you said you had 2 mortgages, maybe the total outstanding was the issue. It's unlikely to be the monthly repayments given todays low interest rates.

More likely, as John suggested, the manager is being *very* cautious.

It's generally a bad idea to get emotionally tied to a particular financial organisation (or advisor) as loyalty gets you shafted. There's plenty of lenders out there, try using some large brokers (note the end comma)

Daytona

Reply to
Daytona

Exisiting mortgage of £34500 and top up of £33500 making one mortgage of £68000 which they said wasn't a problem as it is less than 3times my annual salary.

I can see the sense in what you say Daytona. Learnt m' lesson this time.

Thanks for the link, I'll have a look

Reply to
Ray L

In message , Ray L writes

Thats complete rubbish!

Same here!!!

Glad you got fixed up, but I reckon YBS were way out of line on that one. Their loss!

Reply to
john boyle

OK my misunderstanding. Either -

- YBS have gone completely risk averse because they feel their existing loan book is of such poor quality that too many people won't be able to make the monthly repayments and need to counter that by only accepting exceptionally safe applicants, which in all reality, probably don't exist, or don't require loans; or

- YBS risk assessment procedures do not work; or

- the advisor hasn't applied the risk assessment procedures correctly, although I thought as much as possible was automated to avoid precisely this problem; or

- all of the above

Not a pretty picture . It makes me wonder if YBS are in some kind of trouble.

I'd be interested in Johns comments on how risk assessment is carried out and what the procedures are for assessing manually.

The end comma on URLs to the Money Saving Expert site has been bugging me for some time, as well known newsreaders such as Agent, do not consider it part of the link, when copying or launching, but I've just had a brainwave and discovered a kludge. So for the benefit of anyone else -

Daytona

Reply to
Daytona

I wondered as much myself. I even wondered if they are trying to offload a few customers prior to floating, which they've always insisted they wouldn't do, to reduce number of free shares etc.

or

Plans afoot to move our ISA's to the Halifax or Abbey tomorrow. All other accounts to be closed next week. A letter of discontent was sent by email to their quality service dept last night and a copy hand delivered to HQ personally this morning such is the feeling.

Will keep our ING Direct account and start to spread the funds abit more like you say Daytona.

Returned the Newcastle BS mortgage application pack today so should have a definite answer fromt hem early next week but looking good so far, mind you I thought that about the YBS!!

Yeah, realised the link didn't work so navigated myself through fromt he home page. Thanks for your views on this, it has reassured me that I am not going mad and I am not suffering from the sour grape syndrome.

Brilliant group, keep up the good work.

Reply to
Ray L

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