Affordability checks on Mortgages - Is this right?
Discussion
Since we first took out our mortgage, I understand that new rules have been bought in by the government to force lenders to diligently check for affordability. I don't have an issue with this, as it clearly makes lots of sense to ensure that people aren't taking on debt they can't afford to repay.
What does annoy me, however, is that I've just been told by our lender that we will need to go through this process - which apparently takes 50-60 minutes!!! - before they're prepared to quote any alternative rates to transfer other than their standard rate.
Most of our mortgage is on BOE BR +1.29% for the life of the mortgage, so I have no intention of touching that, but we've got a fairly small amount on a different rate, and it strikes me they're using this affordability nonsense to try and discourage me from asking for a better rate!
After all, we've been paying the mortgage for the past 14 years with no problems, which surely suggests better than anything else that we can afford to pay back what we're borrowing now, and I'm only going to change to a different offering if it lowers the amount I'm currently repaying, which therefore can only make the loan more affordable.
Has anyone else come across this issue? Quite apart from the hassle over what might just be a saving of a fiver a month or so, what on earth would happen if by some bizarre quirk, we actually failed the affordability assessment? Could they then make us close down the mortgage we've been merrily paying for years because in theory we can't afford it, despite the fact that in practice we obviously can?
What does annoy me, however, is that I've just been told by our lender that we will need to go through this process - which apparently takes 50-60 minutes!!! - before they're prepared to quote any alternative rates to transfer other than their standard rate.
Most of our mortgage is on BOE BR +1.29% for the life of the mortgage, so I have no intention of touching that, but we've got a fairly small amount on a different rate, and it strikes me they're using this affordability nonsense to try and discourage me from asking for a better rate!
After all, we've been paying the mortgage for the past 14 years with no problems, which surely suggests better than anything else that we can afford to pay back what we're borrowing now, and I'm only going to change to a different offering if it lowers the amount I'm currently repaying, which therefore can only make the loan more affordable.
Has anyone else come across this issue? Quite apart from the hassle over what might just be a saving of a fiver a month or so, what on earth would happen if by some bizarre quirk, we actually failed the affordability assessment? Could they then make us close down the mortgage we've been merrily paying for years because in theory we can't afford it, despite the fact that in practice we obviously can?
"After all, we've been paying the mortgage for the past 14 years with no problems"
^This means nothing (to a lender).......
Lenders are not obliged to provide new products for you to switch to.....you signed up to the T&C's of the mortgage you took out previously.......but within it will be nothing about the lender being obliged to off you new rates to switch to.
Therefore, if you apply for a new rate, they will want to assess your eligibility under current lending criteria, not historic criteria, so it matters not if the new rate will mean lower payments....thats not an automatic indicator that you will pass the affordability assessment.
If you failed it, they would just decline to transfer you to the new rate and you would continue with the mortgage you have, they can't force you to sell up.
Some lenders allows transfers without new assessments, some require a full underwrite, some will only want to re-underwrite if there is any further lending involved.
To me, it sounds like you have been with them for a while and they want to cleanse their mortgage book and ensure that all current clients confirm to current regulations (MMR, ECD)....hence the questions...............just suck it up and secure the new rate
^This means nothing (to a lender).......
Lenders are not obliged to provide new products for you to switch to.....you signed up to the T&C's of the mortgage you took out previously.......but within it will be nothing about the lender being obliged to off you new rates to switch to.
Therefore, if you apply for a new rate, they will want to assess your eligibility under current lending criteria, not historic criteria, so it matters not if the new rate will mean lower payments....thats not an automatic indicator that you will pass the affordability assessment.
If you failed it, they would just decline to transfer you to the new rate and you would continue with the mortgage you have, they can't force you to sell up.
Some lenders allows transfers without new assessments, some require a full underwrite, some will only want to re-underwrite if there is any further lending involved.
To me, it sounds like you have been with them for a while and they want to cleanse their mortgage book and ensure that all current clients confirm to current regulations (MMR, ECD)....hence the questions...............just suck it up and secure the new rate
In my experience (and sample size of 1), the call doesn't last that long unless there is anything out of the unusual.
If you're on PAYE tax, haven't changed job recently, don't spend £100s on gambling sites and gym memberships, have owned the house for years and have a clean credit record, I can't see it taking hours
If you're on PAYE tax, haven't changed job recently, don't spend £100s on gambling sites and gym memberships, have owned the house for years and have a clean credit record, I can't see it taking hours
mcflurry said:
In my experience (and sample size of 1), the call doesn't last that long unless there is anything out of the unusual.
If you're on PAYE tax, haven't changed job recently, don't spend £100s on gambling sites and gym memberships, have owned the house for years and have a clean credit record, I can't see it taking hours
However, in my experience based on a sample of 1.. If you're on PAYE tax, haven't changed job recently, don't spend £100s on gambling sites and gym memberships, have owned the house for years and have a clean credit record, I can't see it taking hours
It was a most painful several hours, over a 4 week period, before I could even get the mortgage company to offer one of their 'products', only to realise it wasn't under terms that suited me. So effectively I ended up wasting 4 weeks, spending hours on the phone to some daft script following irish bint before I got told the product I wanted wasn't what I actually wanted. She wouldn't entertain a discussion about the product until we'd gone through the whole process so she could 'recommend' me the product I was interested in. f
king bell ends.Ended up going to another mortgage lender and getting a deal more aligned to my own requirements, although their process was also a little painful to be fair.
Would have been far more sensible to discuss the 'product' first, and then check elligibilty.
Long gone are the days when a currrent contract and a CV could get you any mortgage you wanted !
Piersman2 said:
It was a most painful several hours, over a 4 week period, before I could even get the mortgage company to offer one of their 'products', only to realise it wasn't under terms that suited me. So effectively I ended up wasting 4 weeks, spending hours on the phone to some daft script following irish bint before I got told the product I wanted wasn't what I actually wanted. She wouldn't entertain a discussion about the product until we'd gone through the whole process so she could 'recommend' me the product I was interested in. fking bell ends.
Santander?king bell ends.I bought a house last November and placed it with Santander. Even as a Mortgage Broker they wouldn't skip any parts of their scripts........two calls at a time......excruciating..............sending documents was a pain...............weird part was that the direct process is about 4x the length of the process I use with them as a Broker......can upload documents in seconds......direct number to the underwriter.......none of that going direct.......wanted to gauge my own eyeballs out at times as the 18 year old in the call centre talked me through the details of the product that I had chosen but they were "advising" me to take!?!?
They are a dream to deal with as a broker for my clients to be fair...........next time I'll have to find myself a decent broker!!
For me too - it was horrific! Stupid numpty at First Direct, following a script and not able to understand 'real world' scenarios. 3 calls, totalling over 6 hours. And we were existing FD mortgage holders with 9 accounts between us and nearly 12 years of history with them - didn't count for anything.
Went with Halifax in the end who were outstanding, lower rate in the end too. I only started down that slippery slope as I'd been so impressed with FD up to that point - I wish I'd never bothered.
Went with Halifax in the end who were outstanding, lower rate in the end too. I only started down that slippery slope as I'd been so impressed with FD up to that point - I wish I'd never bothered.
Piersman2 said:
However, in my experience based on a sample of 1..
It was a most painful several hours, over a 4 week period, before I could even get the mortgage company to offer one of their 'products', only to realise it wasn't under terms that suited me. So effectively I ended up wasting 4 weeks, spending hours on the phone to some daft script following irish bint before I got told the product I wanted wasn't what I actually wanted. She wouldn't entertain a discussion about the product until we'd gone through the whole process so she could 'recommend' me the product I was interested in. fking bell ends.
Ended up going to another mortgage lender and getting a deal more aligned to my own requirements, although their process was also a little painful to be fair.
Would have been far more sensible to discuss the 'product' first, and then check elligibilty.
Long gone are the days when a currrent contract and a CV could get you any mortgage you wanted !
It was a most painful several hours, over a 4 week period, before I could even get the mortgage company to offer one of their 'products', only to realise it wasn't under terms that suited me. So effectively I ended up wasting 4 weeks, spending hours on the phone to some daft script following irish bint before I got told the product I wanted wasn't what I actually wanted. She wouldn't entertain a discussion about the product until we'd gone through the whole process so she could 'recommend' me the product I was interested in. f
king bell ends.Ended up going to another mortgage lender and getting a deal more aligned to my own requirements, although their process was also a little painful to be fair.
Would have been far more sensible to discuss the 'product' first, and then check elligibilty.
Long gone are the days when a currrent contract and a CV could get you any mortgage you wanted !
Edited by LotusMartin on Friday 30th June 15:24
Sarnie said:
Santander?
I bought a house last November and placed it with Santander. Even as a Mortgage Broker they wouldn't skip any parts of their scripts........two calls at a time......excruciating..............sending documents was a pain...............weird part was that the direct process is about 4x the length of the process I use with them as a Broker......can upload documents in seconds......direct number to the underwriter.......none of that going direct.......wanted to gauge my own eyeballs out at times as the 18 year old in the call centre talked me through the details of the product that I had chosen but they were "advising" me to take!?!?
They are a dream to deal with as a broker for my clients to be fair...........next time I'll have to find myself a decent broker!!
I bought a house last November and placed it with Santander. Even as a Mortgage Broker they wouldn't skip any parts of their scripts........two calls at a time......excruciating..............sending documents was a pain...............weird part was that the direct process is about 4x the length of the process I use with them as a Broker......can upload documents in seconds......direct number to the underwriter.......none of that going direct.......wanted to gauge my own eyeballs out at times as the 18 year old in the call centre talked me through the details of the product that I had chosen but they were "advising" me to take!?!?
They are a dream to deal with as a broker for my clients to be fair...........next time I'll have to find myself a decent broker!!
You should know, it was you that arranged my replacement mortgage - with Santander. Although to be fair it wasn't without Santander asking some rather irrelevant questions along the way.It was Halifax, who I'd had my mortgage with for 7 years, that dicked me around with the stupid irish woman for 4 weeks. Thankfully, you managed to find a deal with Santander which was more what I wanted. Still took Santander about 2-3 weeks to get themselves sorted out.
Piersman2 said:
You should know, it was you that arranged my replacement mortgage - with Santander. Although to be fair it wasn't without Santander asking some rather irrelevant questions along the way.It was Halifax, who I'd had my mortgage with for 7 years, that dicked me around with the stupid irish woman for 4 weeks. Thankfully, you managed to find a deal with Santander which was more what I wanted. Still took Santander about 2-3 weeks to get themselves sorted out.
fuzzyyo said:
I just remortgaged with halifax. I didn't speak to anyone and did it all online. Although we did go through all the checks the first time so maybe they give you the benefit of doubt if you've been through the process once.
Halifax lost my mortgage after I asked for a different product after paying off a significant chunk of what was owed. I was unwilling to go through several hours of box ticking for no apparent reason - so I found a broker and got a better deal.
Mr E said:
Halifax lost my mortgage after I asked for a different product after paying off a significant chunk of what was owed.
I was unwilling to go through several hours of box ticking for no apparent reason - so I found a broker and got a better deal.
If it wasn't for the fact that nobody is going to give me anything like as good a deal as I've currently got on the vast majority of my mortgage, I'd be voting with my feet too. As it is, it sounds like I'm stuck with either going through this tortuous process, or accepting that it's costing me a couple of quid extra per month not to do so.I was unwilling to go through several hours of box ticking for no apparent reason - so I found a broker and got a better deal.
I think I'll go for the latter.
My Nationwide deal is ending in October and my plan is to take a new product with them online. From my limited understanding this should mean i wont have to go through the new checks as i'm not borrowing a larger amount than i owe or changing the term. Im sure its called a execution only mortgage or non advised or something.
Its a bit frustrating as i can reduce my term from 18 years to 10 years and still keep the same payment as now but i cant be bothered with all the hassle. Ive overpaid about 30% in last 3.5 years so the debt has reduced considerably. My plan is to take a product with no overpayment limit and simply overpay each month.
Its a bit frustrating as i can reduce my term from 18 years to 10 years and still keep the same payment as now but i cant be bothered with all the hassle. Ive overpaid about 30% in last 3.5 years so the debt has reduced considerably. My plan is to take a product with no overpayment limit and simply overpay each month.
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