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'WE'RE MORTGAGE PRISONERS' Bank tells Family they can’t buy a SMALLER house & mortgage 

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'WE'RE MORTGAGE PRISONERS' Bank tells Family they can’t buy a SMALLER house & mortgage 

 

https://www.thesun.co.uk/money/6243367/family-told-by-santander-they-cant-buy-a-smaller-house-with-cheaper-mortgage/

Quote

On top of this, the couple had already racked up £20,000 in credit card debt from their wedding in 2016 and a training course for Carl, 24, who is a lorry driver.

Moving to a smaller house would reduce their mortgage to £145,000, saving them around £200 a month.

And because their house has increased in value over the past four years by £25,000, freeing up the equity would mean they could pay off their credit card debt, saving them another £350 a month.

They were told by a Santander adviser that they could move their mortgage for fee for breaking the fixed-term early.

This would be 5 per cent of the £9,000 difference between their old mortgage and the new one - which works out at £450.

The couple pressed ahead and found a three-bed house in Coalville, Leicestershire, and even found a buyer for their Derbyshire home.

But a few weeks later Santander rejected their application because they failed affordability checks introduced in 2014, even though they'd never missed a payment.

The new regulations by the Financial Conduct Authority look at monthly expenditure before deciding whether or not they will lend.

 

 

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Three years into a  mortgage that is difficult to pay they go for a big wedding ( presumably) and add the best part of 20k to their borrowings in crippling credit card APR.

Nothing wrong with getting married but a simple ceremony might have saved their current financial crisis.

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1 hour ago, crashmonitor said:

Three years into a  mortgage that is difficult to pay they go for a big wedding ( presumably) and add the best part of 20k to their borrowings in crippling credit card APR.

Nothing wrong with getting married but a simple ceremony might have saved their current financial crisis.

a gretna green affair would have sufficed,    i know a rich family that spent 60k on their wedding. 

sadly now divorced. 

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Its not clear, did Carl spend some of the credit card debt on a training course to become a lorry driver or to get a better paid job? How much does it cost to learn to drive a lorry ffs?

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2 hours ago, Sugarlips said:

Its not clear, did Carl spend some of the credit card debt on a training course to become a lorry driver or to get a better paid job? How much does it cost to learn to drive a lorry ffs?

About 2k

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10 minutes ago, Ah-so said:

5% deposit suggests HTB. Now we know what happens when the deals are up.

Well, she was only 18, he was 20 when they bought the house.

The 'saving for years' s BS.

Mind you, sos spending 20k on a wedding.

And Id seriously doubt the claim that the place they bought has increased in value. As a new build outside of London, its probably worth less.

I know of four couples who bought houses between 2008 and MMR.

All have lost the house.

 

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Imagine the headlines if it has worked out the way they wanted and they'd made an easy 100k in hpi .

 

Tough sh1t heh.

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1 hour ago, spyguy said:

 

And Id seriously doubt the claim that the place they bought has increased in value. As a new build outside of London, its probably worth less.

Amazing that govt actually encourages this. Help To Buy should more accurately be called INE (Instant Negative Equity)

Edited by PropertyMania

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40 minutes ago, Si1 said:

Imagine the headlines if it has worked out the way they wanted and they'd made an easy 100k in hpi .

 

Tough sh1t heh.

This! one million times. The funny thing is that they were probably paid a few hundred quid to show the sad faces with pram for the article. 

 

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Looks like they have £150k+ of debt on one wage.What will he be on £30k?.When they bought the first time they had two wages.They want to borrow 5 times earnings.

£20k wedding.Iv seen it many times where the £20k wedding and a few holidays paid for with MEWing end up costing people their home.I very much doubt the house has gone up £25k.

Looks like they made a terrible financial choice as they should of bought a two up two down terrace and got married on the cheap.Instead they will probably end up struggling for decades,at best.

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It is that classic trap discussed on HPC of buying a house you can just about afford not taking into account potential changes that have a strong chance of happening. In this case, having a child and the childcare costs effectively meaning giving up work for one of them was preferable. The wedding spending seems like typical keeping up with the Jones's madness sadly... so corrosive this materialistic culture.

I do have a bit of sympathy though, yes the problem is their own making, but they were very young when they signed up with little experience of just how hard it is to pay back debts after monthly living costs. I am puzzled though how the two of them with almost no savings could get a £160,000 mortgage. In today's Britain though it's all about how rich your parents are... if they'd been born to wealthier ones they'd probably have been given £50K plus and not be in this situation at all and congratulating themselves on their well run lives. What a shame for our society it is going backwards.

Edited by Save me from the madness!
forgot to add K on the £50

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Yeah on 17k a year pointless working when childcare fee's are not far off 1k a month even if she did stay in work MMR would stop them as MMR takes into account the child care fees for affordability 

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2 hours ago, Save me from the madness! said:

It is that classic trap discussed on HPC of buying a house you can just about afford not taking into account potential changes that have a strong chance of happening. In this case, having a child and the childcare costs effectively meaning giving up work for one of them was preferable. The wedding spending seems like typical keeping up with the Jones's madness sadly... so corrosive this materialistic culture.

I do have a bit of sympathy though, yes the problem is their own making, but they were very young when they signed up with little experience of just how hard it is to pay back debts after monthly living costs. I am puzzled though how the two of them with almost no savings could get a £160,000 mortgage. In today's Britain though it's all about how rich your parents are... if they'd been born to wealthier ones they'd probably have been given £50K plus and not be in this situation at all and congratulating themselves on their well run lives. What a shame for our society it is going backwards.

I have to agree with this bit, I am a "mortgage prisoner" (its how/why I found this site).  I was young, naive and bought into the "Bricks and Mortar only ever go up" talk from the older generation. The sales rep at the new builds had no problem palming off a sh*t box on me (houses only ever go up in value init). 

10 years on and I have a lot more experience but the younger generation I talk to who are looking to buy dont (wont?) listen when I tell them how bad new builds / htb / silly house prices are and just how big a mistake I made at their age.

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32 minutes ago, Stockton said:

I have to agree with this bit, I am a "mortgage prisoner" (its how/why I found this site).  I was young, naive and bought into the "Bricks and Mortar only ever go up" talk from the older generation. The sales rep at the new builds had no problem palming off a sh*t box on me (houses only ever go up in value init). 

10 years on and I have a lot more experience but the younger generation I talk to who are looking to buy dont (wont?) listen when I tell them how bad new builds / htb / silly house prices are and just how big a mistake I made at their age.

It's strange that you expect others not to have the same greed you had. I don't mind if others are greedy either, it's really none of my business. I just don't like it when taxpayers or markets are forced to make it a one-way bet, especially at this leverage.

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