We have a mortgage of about 100k on a 450k house with a building society. We have had a mortgage for the last 10 years and have never missed a payment. For the last 3 years we have been voluntarily paying an additional 350 per month extra which has brought the term down quite a bit.
Over the last 2 years my husband has had problems with his business, mainly as a result of his father being seriously ill for a long while (he died a year ago), and he found it difficult to focus on the business, especially with being regularly called to go to the hospital halfway across the country every time his dad got bad. He has been paying catch up for some time but as a result has defaulted on one or two loans/leases which could have resulted in him getting a bad credit rating.
We decided to get a 25k top up on our mortgage to pay off the loans and make our monthly outgoings well within our means. We were going to drop our additional 350 a month by the 150 for the topup so we wouldn't have any extra to pay each month. We thought, given our good record with the building society and the fact that we have been voluntarily paying extra, that this would not be a problem. How wrong we were!!!
The problem seems to be that they base their decision purely on a proven income and nothing else. It is difficult to prove any salary for my husband, other than a letter from his accountant. I went on a 3 day week a while ago, using parental leave so since I am still officially "fulltime" I thought they would base it on my confirmation from my employer of my fulltime salary - but no, they base it on my last 3 months earnings which is 3/5 of my normal salary. I've told them I'll be going back fulltime but that is not considered. The other problem seems to be that in order to get a topup you need to pretend that you are actually getting work done on the house - so we got a quote for 17k of the 25k and said we were using the rest to pay back the loans - but then they consider the loan/credit card repayments as part of your monthly outgoings and will probably refuse the loan as a result of these payments!!
Everywhere I look these days the advice seems to be to consolidate your loans, using the equity on your house. But when it comes down to it, it doesn't actually seem to work out that way.
We have plenty of equity and a good record, neither of which seems to be even taken into the equation. The other annoying thing is that based on the building society's mortgage affordability calculator we would be able to get a mortgage of 230k if we applied as a new customer (based on 3/5 of my salary and a very basic salary for my husband), yet they may refuse us 25k which would only bring us up to a total of 125k. It doesn't make sense.
All this is before they even do a credit check - which could be another problem.......
Has anyone any advice to give? If they do refuse us, is there anywhere else we can go - eg for an unsecured loan?
Over the last 2 years my husband has had problems with his business, mainly as a result of his father being seriously ill for a long while (he died a year ago), and he found it difficult to focus on the business, especially with being regularly called to go to the hospital halfway across the country every time his dad got bad. He has been paying catch up for some time but as a result has defaulted on one or two loans/leases which could have resulted in him getting a bad credit rating.
We decided to get a 25k top up on our mortgage to pay off the loans and make our monthly outgoings well within our means. We were going to drop our additional 350 a month by the 150 for the topup so we wouldn't have any extra to pay each month. We thought, given our good record with the building society and the fact that we have been voluntarily paying extra, that this would not be a problem. How wrong we were!!!
The problem seems to be that they base their decision purely on a proven income and nothing else. It is difficult to prove any salary for my husband, other than a letter from his accountant. I went on a 3 day week a while ago, using parental leave so since I am still officially "fulltime" I thought they would base it on my confirmation from my employer of my fulltime salary - but no, they base it on my last 3 months earnings which is 3/5 of my normal salary. I've told them I'll be going back fulltime but that is not considered. The other problem seems to be that in order to get a topup you need to pretend that you are actually getting work done on the house - so we got a quote for 17k of the 25k and said we were using the rest to pay back the loans - but then they consider the loan/credit card repayments as part of your monthly outgoings and will probably refuse the loan as a result of these payments!!
Everywhere I look these days the advice seems to be to consolidate your loans, using the equity on your house. But when it comes down to it, it doesn't actually seem to work out that way.
We have plenty of equity and a good record, neither of which seems to be even taken into the equation. The other annoying thing is that based on the building society's mortgage affordability calculator we would be able to get a mortgage of 230k if we applied as a new customer (based on 3/5 of my salary and a very basic salary for my husband), yet they may refuse us 25k which would only bring us up to a total of 125k. It doesn't make sense.
All this is before they even do a credit check - which could be another problem.......
Has anyone any advice to give? If they do refuse us, is there anywhere else we can go - eg for an unsecured loan?