Hi all,
We would appreciate members feedback on the following situation we are going through.
We bought a house last year which needs considerable renovation. We have a small mortgage on it as the bank would only lend us a small amount as our incomes are relatively low. We have no other loans and have an excellent credit rating. We are currently renting and the house will be our primary residence once it is completed. When the work is completed the house will be worth more than double what it is now.
We have about half the money ourselves to do the renovations and so applied to the bank for a mortgage top-up for the rest - 40k. Following a very positive 2 hour meeting where the person from the bank said repeatedly "I don't see any problem with this" we have now been told that they won't lend us any amount of money on the mortgage top-up. However they will lend us the same amount - 40k -on a personal loan rate - double the interest rate of the mortgage. So instead of paying an extra e220 pm for the mortgage top-up it will be e530pm.
The standard reasons have been given for not giving us the mortgage top-up - it didn't meet the stress test with an extra 2% - and that the mortgage loan is secured against the property where as the personal loan isn't stress tested or secured.
We feel this is a blatant profiteering measure from the bank. Over the past several months we have fielded several calls and emails from them where we feel they have been trying to push us into the personal loan but we have insisted on the mortgage top-up. We are aware that over the term of the personal loan we will pay less interest but from a monthly point of view it does not suit us to pay that much in addition to the mortgage - we are already paying an equivalent amount in rent and want to lessen our outgoings.
Our questions are:
has anyone else experienced this situation of being turned down for a mortgage top-up yet being offered a personal loan for the same amount of money at double the rate?
have we any redress to complain about this or is it standard practice?
Thanks in advance.
We would appreciate members feedback on the following situation we are going through.
We bought a house last year which needs considerable renovation. We have a small mortgage on it as the bank would only lend us a small amount as our incomes are relatively low. We have no other loans and have an excellent credit rating. We are currently renting and the house will be our primary residence once it is completed. When the work is completed the house will be worth more than double what it is now.
We have about half the money ourselves to do the renovations and so applied to the bank for a mortgage top-up for the rest - 40k. Following a very positive 2 hour meeting where the person from the bank said repeatedly "I don't see any problem with this" we have now been told that they won't lend us any amount of money on the mortgage top-up. However they will lend us the same amount - 40k -on a personal loan rate - double the interest rate of the mortgage. So instead of paying an extra e220 pm for the mortgage top-up it will be e530pm.
The standard reasons have been given for not giving us the mortgage top-up - it didn't meet the stress test with an extra 2% - and that the mortgage loan is secured against the property where as the personal loan isn't stress tested or secured.
We feel this is a blatant profiteering measure from the bank. Over the past several months we have fielded several calls and emails from them where we feel they have been trying to push us into the personal loan but we have insisted on the mortgage top-up. We are aware that over the term of the personal loan we will pay less interest but from a monthly point of view it does not suit us to pay that much in addition to the mortgage - we are already paying an equivalent amount in rent and want to lessen our outgoings.
Our questions are:
has anyone else experienced this situation of being turned down for a mortgage top-up yet being offered a personal loan for the same amount of money at double the rate?
have we any redress to complain about this or is it standard practice?
Thanks in advance.