|
General Volvo and Motoring Discussions This forum is for messages of a general nature about Volvos that are not covered by other forums and other motoring related matters of interest. Users will need to register to post/reply. |
Information |
|
Banks are strangeViews : 633 Replies : 7Users Viewing This Thread : |
|
Thread Tools | Display Modes |
Oct 11th, 2018, 16:12 | #1 |
FCW Auto Service
Last Online: Apr 25th, 2024 23:31
Join Date: Feb 2015
Location: Gloucester
|
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? |
Oct 11th, 2018, 17:54 | #2 |
Premier Member
Last Online: Dec 26th, 2021 13:42
Join Date: Dec 2013
Location: Crewe
|
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.
__________________
2002 S60 SE D5 Manual 209000 miles |
Oct 11th, 2018, 18:54 | #3 |
VOC Member
Last Online: Mar 18th, 2024 12:17
Join Date: Jul 2008
Location: Henley on Thames
|
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?
__________________
[IMG]Volvo2 by Strider'swoman, on Flickr[/IMG] Current '96 945 2.3 lpt - Aurigas, tailgate spoiler, sports grille, lpg fuelled Previous '88 764 TD, '92 945 TD, '88 745, '81 244 DL |
Oct 11th, 2018, 19:18 | #4 |
Premier Member
Last Online: Jul 22nd, 2021 23:43
Join Date: Aug 2006
Location: Huddersfield
|
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. |
The Following User Says Thank You to I-S For This Useful Post: |
Oct 11th, 2018, 19:24 | #5 |
Premier Member
Last Online: Jul 13th, 2021 21:30
Join Date: Jan 2014
Location: North Yorkshire
|
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!
|
Oct 11th, 2018, 20:29 | #6 | |
FCW Auto Service
Last Online: Apr 25th, 2024 23:31
Join Date: Feb 2015
Location: Gloucester
|
Quote:
I suppose the real question is why the heck would anyone want to add 10k onto a 38 year mortgage... |
|
Oct 12th, 2018, 17:28 | #7 |
Non VOC Member
Last Online: Yesterday 23:45
Join Date: Jun 2011
Location: Milton Keynes
|
Some years ago my bank started doing 'one account' where they lumped all of your money together so any savings or positive balances were offset against the mortgage to lower the interest costs, the only issue was that my mortgage wasn't big enough to qualify. In order to get the 'one account' I had to borrow another £7500 which had to be for a sensible purpose, at about the same time the wife needed a new car. I told the bank that I wanted to replace the kitchen so they happily advanced the extra money and then lumped the accounts together and the money in my savings effectively offset the extra loan. But we did have a bit of fun when buying the car as the dealers insisted we talk to their finance department, so we sat there and listened to their spiel and then I said to the wife 'We can just add it to the mortgage' knowing it was already covered by the offsetting, the finance guy nearly had a heart attack and then lectured me on having a 25 year loan for a car that wouldn't last that long while we just sat there and said we weren't bothered.
__________________
David V70 2.5 10v Torslanda Manual 98 Sreg |
Oct 12th, 2018, 17:28 | #8 |
Member
Last Online: Jan 27th, 2024 16:28
Join Date: Dec 2016
Location: Lincoln
|
Yes I was thinking a personal loan would seem a better a bet. I think there are specific laws around affordability on mortgages which aren’t there for personal loans. If you look to remortgage your loan will be taken into account though.
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests) | |
|
|