Bank refused us mortgage top-up. Why?

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LovelyHome

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I posted this somewhere else too as I wasn't sure where to put it...

We got a tracker mortgage of 200,000 from NIB before Christmas to buy a famly home in the city centre which is valued at 450,000. (The tracker rate was pulled shortly after our application so we were delighted we got it.) It needs some renovation and an extension. We rang the bank about this in January and there didn't seem to be any problem with it. I went into the bank today with the builder's quote for the work which will come in at about 80,000. The bank manager had made an appointment with me for the mortgage application but when I came in with all my documents she said to me something to the effect of "We are not taking any more applications for loans connected to property." That was it. She said that our credit was perfect, account was good, etc....but would not entertain even allowing us to apply for even 20,000 top-up.

I was stunned to say the least.

She told me to try the other banks but said they were just as bad and that she had friends herself who were professionals who couldnt get credit.

Afterwards I rang a broker who said based on our income we should have no problem getting a mort of 280,000, however I don't want to leave NIB because I have the tracker there and will not get it again.

Does anyone have any idea of what is going on??? Is it that bad out there???
 
I had the same story with NIB so you're not alone. I'm looking for a new mortgage but the lady I was talking to basically stopped me mid-flow to state that they weren't giving any top-ups/equity release on any properties (even though I wasn't looking for one). So their story is consistent, if inexplicable. Perhaps things will loosen up in a few months.
 
Can you put off these renovations for a couple of months and then perhaps NIB will offer you the top up you require . .

They would probably be happy for you to leave them as the Tracker Mortgages are costing banks alot. Might sound cynical but they may be purposely refusing the top up in the hope that you would go and save them the tracker rate they are offering you.

I would be extremely slow to even consider getting out of any tracker mortgage. It should really be only done in exceptional circumstances when you have no other choice.

If you can continue living in your house either get some shorter term finance and get must do things done (if possible) or preferably leave any unneccesary changes until NIB are more accomodating .
 
What tracker rate is it? if its less than ECB+1% your probably better off waiting until NIB wants to lend again (thats how they make the most money so it wont last forever), If its over ECB+1% you might be as well off looking at the big 2 banks AIB BOI, Their current SV are around ECB+1.25% and as their partially public banks its very likely that their SV will move in direct line with the ECB.
 
LovelyHome said:
Does anyone have any idea of what is going on??? Is it that bad out there???
Click to expand...

Yes it is that bad, there is no credit available, or only to the select few (high income, low mortgage to asset value, and permanent pensionable employment). My bank has told me they will not loan me any money currently in relation to property transactions. Why don't you save the renovation money, or do it bit by bit or wait. Building costs have also come down, so maybe you could get a cheaper quote.
 
Hi. Firstly, thanks to everyone who offered advice. I really appreciate it. I went into my local Credit Union this morning and asked for a loan for 60K over 10 years. I lodged 25k into my Credit Union account to make it more attractive for them to do it. (I think they loan up to five times what's in your account.)

Thankfully, they rang me this afternoon to say that I was approved.

We're delighted.

The scales have been taken away from my eyes in relation to the banks now. I'm really disappointed with the treatment I got. I am not leaving my Tracker and will tell the Bank Manager the same when I go in on Tuesday for my paperwork. They'll need to kill me first!!!
 
LovelyHome said:
Hi. Firstly, thanks to everyone who offered advice. I really appreciate it. I went into my local Credit Union this morning and asked for a loan for 60K over 10 years. I lodged 25k into my Credit Union account to make it more attractive for them to do it. (I think they loan up to five times what's in your account.)
Click to expand...

Can I ask what rate the CU is giving you? Also, how long did it take to arrange and is the loan secured against the house or unsecured? Am waiting for The Decision from NIB and want to look at other options if they turn me down flat. Have capital that I can lodge to the CU if they'll loan me 5X what's in the account.

Thanks v much for any info
Sprite
 
I got a credit union loan for 24 times what was in my account back in 2006! How times have changed
 
I had a similar experience with trying to get NIB to reschedule existing payments (not even trying to borrow more - just stretching it out over time). They made a big fuss over 'this would have to be a new mortgage' to try to get me off the tracker, but I'm not budging.
 
The loan with the Credit Union is unsecured. I was so delighted that I got it that I didn't ask the interest rate, but based on their 'home renovation' rate it's about 6%. It's a lot and not ideal, but the best I could get with the refusal with the bank. I'm not sure that I might qualify for tax relief on it. Something in the budget about the first 7 years of relief will apply for a loan re. property, so that might help.

The good thing is that it will be paid off in 10 years as apposed to 30years which was the term I was trying for with NIB to give us 'wiggle room' for the first year during the renovations.
 
Dear Complainer,
In relation to your situation with NIB, there was an article in the Independent and Irish Mail about how the banks are putting pressure on people to move accounts to standard variable when asked for more flexible repayments. It was advised to report these banks to the regulator. If I were you, I would ask them for that in writing and I would have evidence there and make a complaint. Its disgraceful they way they are behaving.
 
Sorry WaterSprite,
I forgot some of your questions:
The length of time with the Credit Union for the application to be successful was just a day. I went in on Saturday morning and got a telephone call Saturday evening. The members meet on Saturday evening and approve things. It seems that the guy I talked to at the window summarised my situation and then went to some Decision Maker there and got the ok before the members met. They were very good to do it for me as he knew I was anxious to know before the bank holiday weekend. I submitted photocopies of all the paperwork NIB had asked us to furnish for the loan approval in December. After being refused by NIB I instructed the manager there to photocopy all of my file so that I would have it for other applications. I also put 3 months of salary statements and bank statements with it. They will want to see the usual stuff you need to submit for a mortgage. They were fantastic. I hope this addresses your questions and good luck with that.
 
LovelyHome said:
Sorry WaterSprite,
I forgot some of your questions:
The length of time with the Credit Union for the application to be successful was just a day. I went in on Saturday morning and got a telephone call Saturday evening. The members meet on Saturday evening and approve things. It seems that the guy I talked to at the window summarised my situation and then went to some Decision Maker there and got the ok before the members met. They were very good to do it for me as he knew I was anxious to know before the bank holiday weekend. I submitted photocopies of all the paperwork NIB had asked us to furnish for the loan approval in December. After being refused by NIB I instructed the manager there to photocopy all of my file so that I would have it for other applications. I also put 3 months of salary statements and bank statements with it. They will want to see the usual stuff you need to submit for a mortgage. They were fantastic. I hope this addresses your questions and good luck with that.
Click to expand...

That's super - thanks v much for the info LovelyHome! As you said, the rates are higher than normal but I'm in the lucky position that I can be flexible on the amount of money I get but in the unlucky position that I've just started as a sole trader and don't have a decent history of accounts built up. I'll call into my local CU next week to cover all the bases just in case NIB turns me down.

Thanks again and good luck with your own house too!
 
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