Banks are strange
So I went to my bank the other week with the purpose of remortgaging, and to borrow an additional £10,000 on top of my 38 year mortgage.
My property is worth just under £150,000 and my mortgage owed was £112,500. Went through the application with their Mortgage advisor, asked me all the questions on affordability etc etc... Outcome? Additional borrowing Declined on the basis of affordability. Fast forward 2 weeks later, I decide to try applying for a £15,000 personal loan over 7 years with the same bank via their online banking system. The system asked me NO QUESTIONS about what my general expenditure and instantly approved and payed out the loan within what must have no more than 2 minutes from filling my name in, to clicking "Apply". I cannot understand the logic here? |
I would say that any mortgage application is almost certain to be analysed at some point by a person whereas a loan application will most likely be computerised and will only give a no or referral if your general credit rating and payment history score doesn't pass an arbitrary pass mark.
I agree that it can appear not to make sense but many financial instruments are counterintuitive. |
Perhaps it is faster and less hassle for a bank to get their money back from a defaulted loan agreement than for a defaulted mortgage?
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38 year mortgage?
That right there is your problem. Assuming that you're not below the age of 30 then they are already looking at you trying to pay off your mortgage without an income in 38 years time. They're certainly unlikely to extend borrowing on that! The loan is over 7 years, so assuming you're not over the age of 55 then they're not going have such concerns. |
You breached the magical 70-75% threshold for refer to another underwriter or re-insurer! Anything secured on your property above 75% always causes more issues, especially if your home isnt that old or a new build flat then they dont even trust your valuation!
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I suppose the real question is why the heck would anyone want to add 10k onto a 38 year mortgage... |
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