how does the mortgage bit work ?

[Deleted User] · August 2007

OK, we bought our 2 bed house 2 years ago and we have a fixed interest rate that is due to run out in March 2008. We would like to move house but not sure how this now works - we were first time buyers last time. So can we just move our mortgage to the new property and just change the amount that we need to borrow or do we have to rearrange the whole thing again? Also can we use the equity we have gained on our current property to use as the deposit for the new property ?

Sorry for so many questions - just want an idea of how it all works before I talk to the muppets at the bank!

Rach

Wilkie · August 2007

The 'muppets at the bank' are probably the best people to talk to - there could be various answers to your questions, which will depend of the terms of your current mortgage.

Typically, at the end of a fixed term you will automatically be moved onto either the standard variable rate, or whatever rate applies under the terms of your mortgage agreement. Without knowing that it's impossible to say which it will be.

Check your paperwork, your mortgage agreement will tell you.

Unknown · August 2007

Yes you can use your equity as a deposit. The mortgage product may or may not be portable, most are. Contact your mortgage provider, tell them of your intentions and they will advice you. If you say the fixed rate runs out in March, and given it would take on average 8-12 weeks to move anyway, it may be worth your while checking if you could re mortgage onto a better product (check your current mtg for redemption penalties) or even wait until March and remortgage onto a better product.
I would recommend you talk with a mortgage consultant or IFA. Lenders can only advice you on their mortgages and don't always offer the best deals. IFA's and mortgage consultants usually have access to exclusive deals.
I use a fantastic Mortgage consultant in Kettering Northants, they've arranged my last few mortgages and i wouldn't fault them. I've done everything over the phone and by post and its always gone smoothly. They are very customer friendly.
Also, Coops is an IFA who gives good advice, im sure he wouldn't mind you contacting him.

[Deleted User] · August 2007

Thanks guys. Right - I'm off to talk to the muppets at the bank!!

Coops10 · August 2007

Rach, 99% of all mortgage deals are portable nowadays. Basically, you will need to move your fixed rate to the new property and continue this running until March 2008. If you need to borrow any more money for the new purchase, make sure you do this on the bank's standard variable rate, which means in March 2008, you will be able to put both of the deals into one without incurring any penalties. Voila.

Coops10 · August 2007

**but beware......as your 2 year fixed rate deal expires in March, you are going to definitely have higher repayments due to the increases in base rate during this time.**

Unknown · August 2007

Coops, about 3 years ago we had a self cert mortgage with the Woolwich. When we came to port the product we weren't allowed as the conditions on the mortgage had changed and we no longer fit the criteria. When we spoke with them they merely said that they reserve the right to change terms and conditions even after our signatures. We ended up paying £4000 in redemption just so we could move.
The Woolwich said we had been given bad advice but we never chased it up as the IFA had gone out of business by then.
Do you think there is anything we can do about it now?

[Deleted User] · August 2007

IFA had gone out of business by then.

wonder why...........

terms and conditions can change kathy but they must be in writing from the bank/mortgage company etc.

even if you think it is "junk" mail fro your provider read it.

Coops10 · August 2007

Kathy - why did you "no longer fit the criteria"?

Unknown · August 2007

Ok thanks TT - it really f***ed us up at the time as we needed to be self cert then 5 months later after we took the mortgage out, they decided they no longer woudl offer the product on a self cert basis. It was annoying as it took £4k from our profit.

Unknown · August 2007

See above post Coops

Coops10 · August 2007

Check the terms and conditions of the original mortgage offer. If they say the product is portable under the same terms, then I'd look into it. Sounds as though they just didn't want to offer the same rate as what you had before. Could the penalties have been avoided if you just proved your income, rather than having to go self cert?

Self certs have their place, but too many people (I'm not saying you), are taking the piss by thinking that "self cert" means, "I can lie about my income". Once the lender asks them to prove themselves (which they are quite within their rights to do), the applicant does a U-turn on the application. A major cause in the rising level of repossessions.

[Deleted User] · August 2007

That sounds wrong Kathy. If you had the product then you had it - they can't just change how it works. Check out the Woolwich complaints procedure. Follow that and when you've exhausted it go to the FSA. Don't know if you'll get your money back but it's worth a shot.

Unknown · August 2007

Yes i understand that. We've never lied about our income, altho one IFA suggested that we do (we didn't use her). The figures we used were alot less than we actually earned, but the problem was proving it.
If we could have proven our income then its hardly a self cert mtg is it...thats just fast track. They wanted an accountant letter, my accountant was my dad, they wouldn't accept it. They wouldn't accept bank statements or proof of conveyancing etc.

Coops10 · August 2007

It sounds wrong to me, but it really depends on how you define "We no longer fit their criteria". If it is because they have changed their terms and conditions, then I would argue it. However, if it is because they wanted you to now prove what you earnt and you couldn't, then you don't have a leg to stand on.

Unknown · August 2007

Coops - just so you know. They didn't ask us to prove our income.They decided that the mortgage would become an 'employed' persons mortgage.

Coops10 · August 2007

You could've got a Chartered Accountant to rubber stamp what your Dad had put for less than £4,000. £200 would have done it. I'm sure the bank would have been more than satisfied with that?

Coops10 · August 2007

Kathy - really? In that case, I'd definitely pursue it. They can't just say "only available to employed people".

Unknown · August 2007

We were classed as self employed. We could have proven our income but they wouldn't accept our accountants letter. I don't see how they can change a self cert mtg to an ;employed' persons mtg. Its ok if your not planning on moving, but when we took it out we knew it would be for less than a year. this is why they say we were given bad advice.

However, if it is because they wanted you to now prove what you earnt and you couldn't, then you don't have a leg to stand on.
How do you suddenly start proving it?

[Deleted User] · August 2007

May of changed over because you slef certed in the 1st place and have paid all the payments etc.

You can afford the payments.

Is slefcert slightly more expensive than standard mortgages?

if so would be good advise to use the cheaper rate. This may be notig to do with the IFA. This is the banks internal complaince department and mortgage underwriters doing some work

Unknown · August 2007

They say that the IFA shud have made us aware that it could change, they didn't.
Initially i thought that the IFA had fast tracked us and not done a self cert at all, he had just told us it was one. Paid the bastard £350 too.

Coops10 · August 2007

How would the IFA know that the Woolwich would change their terms and conditions in the future?

Unknown · August 2007

TT - our self cert rate wasn't too bad but i think the rate is usually higher.
We now use affordability mortgages as we are a mixture of employed and self employed income and its just so much easier.

[Deleted User] · August 2007

Originaly self cert mortgages where for self employed peeps that had less than 3 years accounts to check.

once 3 years accounts are in place you have a firmer base to underwrite the mortgage on.

Selfcert has been hijacked in a small way by others to get a mortgage.

[Deleted User] · August 2007

I just have to say don't worry about the IFAs....

Watch the underwritiers

Coops10 · August 2007

I'm lost! Why have you blamed the IFA for the fact that you paid him to source you a mortgage (which he did), but that the Woolwich asked you for further info when you moved a year later? That's not the IFA's fault surely?

Unknown · August 2007

We didn't have 3 years of anything TT
Coops- i agree, how would he have known. I'm quite sure he fast tracked us but sold us a true self cert...if you know what i mean.

Coops10 · August 2007

Hindsight is a wonderful thing, and I think if you had time on your side when you were moving, there may have been ways around avoiding this penalty. However, I'm not sure anyone is at fault.

Unknown · August 2007

Am i not making myself clear...we were sold a self cert but he simply used a fastrack. They are different no?

Unknown · August 2007

Well after that experience and also the lady IFA in Norwich who told us to lie about being employed and to bump our income up, i stay clear of them.
I know they're not all the same, but as with EA's there are a few dodgy guys about.

[Deleted User] · August 2007

If your self employed and don't have 3 years accounts, self cert is the way forward.

however after 12 months, You have money behind you(still not 3 years) but more information for the bank to look at. Thus you would not then meet critira as YOUR curcumstances have changed.

Otherwise everyone would have the same mortgage till they died. Not the banks fault that your circumsances changed.

reverse it.......Superduper mortgage deal as banks best customer. would you then give the same superduper deal if he was on the verge of bankruptcy? No!

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