Existing mortgage lender has denied us additional borrowing. What are the alternatives?

Posted on 9 August 2007

I need £90,000 to put as a deposit for a buy-to-let flat from my existing lender.  My current morgage balance is £48,000 and my property value is £260,000 but have they told me that I can only have £24,000 additional borrowing.  Our joint income is £46,000, so I dont understand as I am never late with my mortgage payments.  Is there any other way I can raise the capital?

You are right, this is odd as you are only asking for a total debt of £138,000 which is only just over half of your property value, and most importantly only three times your joint incomes.  Perhaps they have found additional credit that you make high monthly repayments on such as credit cards or loans?  This would eat up a lot of the monthly income that a lender could use to calculate your maximum loan amount.  Or it may be that you have some bad credit that is not mortgage related?  You can only find this out by getting your credit report from www.equifax.co.uk or www.experian.co.uk.  I don't know your age but it is possible that your lender has restricted the loan amount based on monthly repayments being squeezed in before you turn 65?
 
I think it would be easiest if you ask them to explain their reasons; they certainly should have done in the first place.  Your alternative is to leave your lender and remortgage elsewhere; preferably to a lender a bit more forthcoming with information!

Best of luck

Katie

Category: Bad credit, Lower mortgage payments, Remortgaging, Special circumstances

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