Recently I attempted to move house, from Manchester to Ellesmere Port. I planned on moving to be nearer work, as the 70 mile round trip is a bit of a time burner (not to mention heavy on the fuel).
I own my house in Manchester, and have about £17,000 in equity in the house and a mortgage with C&G, who are part of Lloyds TSB – my bank. I wanted to release that equity to use it as a sizable deposit on another house. Now, without going into significant financial details and the particulars of the purchase, and the equity release, I wanted to buy a house in Ellesmere Port for £72,000 – which was significantly cheaper than I’d have been selling my Manchester home for, and port my mortgage across – which this time last year would have been a formality.
Not so now however. After handing out mortgages left, right and centre to people who had no means of paying them back, causing the economy and the housing market to collapse, the banks have now gone the other way and aren’t giving mortgages, even to people who can afford them and are indeed already paying more to them now.
I wanted to reduce my mortgage by about £100 per month, trade up for a bigger (cheaper) house and reduce my liability with the bank – reducing the amount they had loaned to me. Basically I wanted to pay THEM money back, reducing my mortgage – and they said, after careful consideration, no – it was too much of a risk. You see, every mortgage application is treated as a new one, even though I would have been porting my mortgage, rather than getting a new one. Even though I’d be giving them money – they still couldn’t see the wood for the trees.
What really annoys me about this isn’t the fact that I’ve lost the house I wanted to buy, or that I’ve been turned down for a mortgage for the first time ever – no, it’s the fact that it’s the banks own stupidity that has caused this financial crisis and now it’s their own stupidity again that is stopping the economy from recovering.
It’s common sense you idiots – if someone already has a mortgage with you and wants to downsize their mortgage, paying you money back, then surely they CAN afford it??? Otherwise they couldn’t afford what they have now.