Jump to content
House Price Crash Forum
helenreed

Lenders Stop Us Moving House

Recommended Posts

"Homeowners are being told that they can no longer take an existing mortgage with them if they move home. Most mortgages are supposed to be 'portable', to be transferred to another property if borrowers wish to move mid-term.

It is feared that this latest crackdown by lenders will undermine the property recovery.

Readers have complained to The Sunday Times that some of the biggest lenders are refusing to allow transfers, with such requests being treated like an application for a mortgage from a new customer and subject to the strictest post-credit crunch criteria of banks.

The tough measures also force customers to pay redemption penalties of tens of thousands of pounds to get out of existing deals.

Robert Baldock, a reader from London, is in the middle of a three-year fixed mortgage with Bank of Scotland on his flat in Connaught Square, two doors from Tony Blair He wants to move but has been told he can't take his £975,000 mortgage with him. His new property is worth £1.1m, against £1.425m for his present home, which would reduce the value of his loan relative to the property from 89% to 68%. To move, he will have to pay a redemption penalty of 3% of the loan - and take out a new mortgage.

'It doesn't make sense,' he said. 'They are more than happy for me to stay where I am and pay a bigger mortgage but will not let me reduce the mortgage and port it to a new, cheaper house.'"

Can this make downsizing too expensive?

Share this post


Link to post
Share on other sites
'It doesn't make sense,' he said. 'They are more than happy for me to stay where I am and pay a bigger mortgage but will not let me reduce the mortgage and port it to a new, cheaper house.'"

I'd say they know exactly what they're doing.

Saw him coming.

Share this post


Link to post
Share on other sites
Robert Baldock, a reader from London, is in the middle of a three-year fixed mortgage with Bank of Scotland on his flat in Connaught Square, two doors from Tony Blair He wants to move but has been told he can't take his £975,000 mortgage with him

Just your average guy then! :lol::lol:

And of course these types have a direct hotline to complain to the Times about it. No wonder newspaper circulation is falling off a cliff.

These "Robert Baldock" person might exist though!

http://www.the-mia.com/company.cfm/id/109/...20Life%20Member

His website:

http://www.speed.uk.com/

Edited by HostPaul TAFKA Rover2000

Share this post


Link to post
Share on other sites

people have no idea how mortgages work

let me explain.

You borrow money against an asset that the bank will force you to sell if you default on your loan.

the headroom on his current property for a forced sale is 450,000.

the headroom on his proposed is 125,000

I suspect the bank thinks this is an overvalue anyway and they want a bigger safety margin...they KNOW prices are falling.

Share this post


Link to post
Share on other sites

Are we really supposed to feel sorry for someone living in a multi million pound property in prime central London.

They really are getting desperate these journalists with their buy to let portfolios. :lol:

Share this post


Link to post
Share on other sites

Those LTV sound funny to me.

His current LTV on the £1.425 million is 68%.

The 89% LTV is if they apply the full £975k mortage to the new property!

So he has £450,000 equity.

If this was paid off the £975,000 mortgage then he should only have £525,000 mortage against the £1.1 mil property, less than a 50% LTV in my mind.

I think he's trying to pocket £100,000 in cash, ending up with a £750,000 mortgage on the the £1.1 mil house.

So it's not a reduction at all in LTV for the bank.

Share this post


Link to post
Share on other sites
"Homeowners are being told that they can no longer take an existing mortgage with them if they move home. Most mortgages are supposed to be 'portable', to be transferred to another property if borrowers wish to move mid-term.

I don't understand this.

Either the original T&C allow the mortgage to be ported or they don't

The law does not allow the banks to change the term retrospectively so they have to stick to the original terms.

Methinks somebody has just assumed all mortgages can be ported to make a news story

tim

Share this post


Link to post
Share on other sites
I don't understand this.

Either the original T&C allow the mortgage to be ported or they don't

The law does not allow the banks to change the term retrospectively so they have to stick to the original terms.

Methinks somebody has just assumed all mortgages can be ported to make a news story

tim

the porting cannot be a done deal at outset...the security will have to remain sufficient and at least as good as when the contract was taken out.

a party cant increase the others risk at will. both have to agree.

Share this post


Link to post
Share on other sites
They really are getting desperate these journalists with their buy to let portfolios. :lol:

Yup. You cannot miss the MASSIVE VI ramping that's going on at the moment. I KNEW this would happen. I KNEW it.

Share this post


Link to post
Share on other sites

If he's trying to increase the LTV from 68% to 89% which is what it actually sounds like he is trying to do, then I'm not surprised. Hell even if is only increasing it marginally that explains it. He definitely isn't trying to reduce the LTV from 89% to 68%, since 975,000/1,425,000 is 68% not 89%... I think the figures are the wrong way round, in which case it really isn't a story, the guy is just a muppet.

Why not just pay the 30k if it's that much of a big deal?

Share this post


Link to post
Share on other sites
If he's trying to increase the LTV from 68% to 89% which is what it actually sounds like he is trying to do, then I'm not surprised. Hell even if is only increasing it marginally that explains it. He definitely isn't trying to reduce the LTV from 89% to 68%, since 975,000/1,425,000 is 68% not 89%... I think the figures are the wrong way round, in which case it really isn't a story, the guy is just a muppet.

Why not just pay the 30k if it's that much of a big deal?

the world would be a better place if journos could do sums and percentages.

Share this post


Link to post
Share on other sites
Just your average guy then! :lol::lol:

And of course these types have a direct hotline to complain to the Times about it. No wonder newspaper circulation is falling off a cliff.

These "Robert Baldock" person might exist though!

http://www.the-mia.com/company.cfm/id/109/...20Life%20Member

His website:

http://www.speed.uk.com/

Does it strike anyone else as being likely that he needs to downsize and withdraw as much equity as possible to support his other "businesses" or "lifestyle" .....

As has been pointed out, he has a lot of equity and is trying to downsize so there must be more to this story than it initially appears ......

Share this post


Link to post
Share on other sites
the porting cannot be a done deal at outset...the security will have to remain sufficient and at least as good as when the contract was taken out.

a party cant increase the others risk at will. both have to agree.

I agree. But nothing has changed here. No-one is doing anything that they didn't do before. The Bank would have refused to let the guy port his mortgage to a lower priced house before the "crunch", so I still don't get what the story is saying. (well I do really - it's just the usual made up nonsense)

tim

Share this post


Link to post
Share on other sites
i quickly dismissed the idea but a thought briefly entered my mind that it might be high house prices, rather than over-strict lending criteria, that stopped these people from moving...

Yup.

People are so thick. :rolleyes::rolleyes: They don't even QUESTION the fact that THEY CANNOT ACTUALLY AFFORD these STUPID prices. They think the Moneylender is doing them a "favour" when, in fact, IT IS THE EXACT OPPOSITE case....

I just DESPAIR....... :angry: :angry: :angry:

Edited by eric pebble

Share this post


Link to post
Share on other sites
Does it strike anyone else as being likely that he needs to downsize and withdraw as much equity as possible to support his other "businesses" or "lifestyle" .....

As has been pointed out, he has a lot of equity and is trying to downsize so there must be more to this story than it initially appears ......

+1

And the mortgage lender want to be first in line to be paid off...

Share this post


Link to post
Share on other sites
+1

And the mortgage lender want to be first in line to be paid off...

of course, equity only exists in the minds of lenders.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   289 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.