Mortgage declined

[Bellyjellee]

We're relocating due to oh changing job in September, he had been on furlough since April in his previous job and we took a 3 month mortgage break. Sold our house, got a mortgage agreement in principal from our existing lender, were completely honest about the whole situation but were told it shouldn't be a problem as we're existing customers and we found somewhere to buy. It took weeks to get an appointment with our building society to make the mortgage application and now we've done it they've declined us saying we have to wait 3 months since the end of our mortgage break and 3 months since oh started new job even if we only borrow the same amount as our current mortgage. We haven't told our estate agents yet and our buyers are already being massively unreasonable wanting to move immediately and are threatening to pull out so not sure how long we can drag it all out. We're still in the fixed mortgage term so will have to pay the early repayment fee if we sell without buying. Is there anything we can do to avoid the early repayment fee given that they are refusing to port our existing mortgage?

What a bloody nightmare. It might be worth you talking to an independent mortgage broker. Don't use the estate agent's recommendations. Ask around and find one with a good reputation.

It seems like we're going to get screwed over whatever we do. Will a mortgage broker be able to help? If we change lenders we'd definitely get charged the early repayment fee and I'm not sure we'd be accepted anyway.

I don't see how you'd get out of paying the early repayment fee, technically your mortgage is still portable, you're just not in a position (as far as the bank are concerned) to move. Unless you're willing to break the chain it sounds like there's a very high likelihood of chain collapsing.

A mortgage broker helped exh and me get a mortgage after we were declined - this was years ago though.

What date will the three months since end of mortgage holiday be and also for 3 months after OH started work? Is your existing mortgage company saying they won't approve anything until the later of those dates?

How much is the penalty for early redemption? Moving to another lender if a broker can help find somewhere that will approve you sounds like it could be very expensive.

Is it possible for OH to rent a room near new job for a few months and you wait out the current lenders requirements to stay with them? Would that be cheaper than paying redemption fees?

You would probably be best off at this point being honest with the EA about the situation and hope the buyers don't pull out. What are they being unreasonable about? Do they have reason to be unreasonable or do they just have an unrealistic perception of the buying process?

It seems massively unfair that the current lenders are being so unhelpful at this time. You already have their money so what difference does it make if it's invested in house a or house b and surely now having a job is better for them than OH being out of work? If in the end you can't pay and they have to repossess it's more likely to be required in the current house without a job rather than new house with new job.

You need to be honest with your buyer and seller. In your circumstances your existing lender was your best hope, because few lenders are interested in people with new jobs and payment holidays. Either you go ahead with your sale and move into rented or you pull out of the whole move.

@TheTeenageYears 3 months from the new job is end of November and 3 months from the end of the mortgage break is around 20th December.

Our buyers had said they want to move mid November as their buyers were threatening to pull out. Apparently she is on the phone screaming at our estate agent every other day. Our estate agents have just had a new branch manager who has been on the case and found out nobody is threatening to pull out and the earliest move date at the bottom of the chain is end of November. I think our buyer definitely has an unrealistic idea of the moving process and it's making it really stressful for all involved. Amongst other things she had already been on suggesting she will have to come in and measure up for blinds and we will have to get the carpets cleaned before we move out and that was before any of the moving date demands started. The estate agent has now proposed a latest completion date of 18th December which will still not be possible with our mortgage.

It is totally unfair. We have asked the building society to reconsider but I can't see us getting anywhere with it.

You could try approaching an Independent Mortgage Broker for advice
Lenders have really become picky and things seem to be changing daily

If it’s Coventry Building Society they’ve been difficult with me and I’m going with another lender via a broker. I have to pay a early redemption of just over £1000 but the new mortgage has cash back so pays most of that. But it’s taking several weeks after being told only two initially.

20th December is terrifyingly close to Christmas and all the holidays and potential delays that brings..

Can you find out the earliest date your mortgage company will allow you to port your existing mortgage and what exactly that means for the date they will allow you to draw down funds. It might be that they can pre approve for completion on that date and if nothing else changes it all goes ahead but if not, the chain collapses.

Maybe there are clauses if you port your mortgage within 3 months you can have the early redemption fee refunded? Check all of the clauses in your mortgage contract and get another appointment to discuss all of the possibilities.

It does sound very tricky though. Good luck.

If you sell you'll have to pay the fee, but if you take up a product/port with them within a set period they often refund it, you'll need to check. We sold in August and didn't complete on our sale until 4 weeks later then got the ERF refunded, that was nationwide and their window was as big as 6 months I think although they're all different.

If it helps, I have a really good independent broker that we have used. For a number of reasons (DH self employed and also he is vulnerable to has had to shield for some of the 1st lockdown) this broker worked magic and we have a mortgage to buy a new house. Really good guy too who is really easy to talk to, and you only pay if you complete on a mortgage.

FYI I have never had to meet the broker, all dealt with by phone and email

@taupeskies do you have the name of the broker? Sorry to hijack but we are in a similar position to op and getting desperate

@chubbyhotchoc have you tried appealing? We threatened to go to the financial ombudsman appealed and got accepted in the end. Our sale has since fallen through so starting again now though

@Bellyjellee we're slightly different. I'm a supply teacher and only getting statutory maternity pay. No way of proving my income or that I will return to work. We sold our house and actually made on it but they won't let us port the mortgage across as it involves a new mortgage application and we're not meeting the criteria. The house we want to buy us actually thirty grand cheaper. Do you mean appealing to the lender?

@chubbyhotchoc sure! We used Paul Ridgeway at AMW Finance. [email protected] he is brilliant and has dealt with two of our mortgages. Plain speaking and very easy to deal with. It's incredibly stressful but he made things easier for us. Wishing you luck.

@chubbyhotchoc yes I mean appealing to the lender. It does sound like you're in a slightly different position as I'm a sahm so our mortgage was only ever based on one wage but they did bring that up as being a problem this time and never had in the past. We appealed on the grounds that if my partner hadn't changed jobs and had stayed on furlough we'd have defaulted on our existing mortgage.

Definitely see an independent mortgage advisor.
Ours doesn't charge.

Ask friends and family to see if anyone can recommend anyone.

I second a mortgage broker! That's what I did and got a mortgage years ago I still probably wouldn't qualify for.

Thanks. We'll keep trying. I think they are being stricter since covid

Our lender declined our new mortgage in the middle of our house purchase this summer (it's was actually about a fortnight before we were meant to move, so super stressful.)

Our broker appealed it and simultaneously put in a new application as a back up. Surprisingly, the original lender relented and we got an offer on the table.

I definitely think a mortgage broker is worth speaking to - they know who to approach and how and can potentially save you a lot of time and worry.