Santander - Refused Additional Borrowing For Home Improvements

[the-enforcer]

Hi,

Me and my mum have a Mortgage with Santander on a 18 year term and we pay £615 per month on a 2 year fixed.
Our current mortgage balance is £109k and our house is worth £200k roughly.
We want to borrow an additional £27k for a house extension we've planned, agreed with builder and planning permission approved from council.
My mum does not work and I have a full-time job with a £35k per year salary.
We don't have any other loans, our credit card balances are zero, we've not missed any bank payments or been declared bankrupt or anything like that.

Borrowing an additional £27k to run along our mortgage equates to £207 a month on top of the mortgage.

I have around £700 per month after paying all bills and mortgage so I can easily afford the £207 extra monthly payment.

But when I spoke to a mortgage adviser over the phone who checked our property to ensure there's enough equity (which there is) and then went through some questions (answers provided above) he then told us that they can't lend anymore money at this time. He told us that if there's any other information I can give him, or if my circumstances change then he can look at it again.

I asked him to tell me on what aspect or criteria we didn't meet, but he wasn't able to give me an answer as he's not allowed to provide advice.

I then spoke to other Mortgage brokers who said they can't see why they won't lend you that money especially as my salary covers the total borrowing.
They have also said that they can get me the mortgage with the additional borrowing from other banks easily.

Can anyone please tell me what else I can do or say to improve my chances of persuading Santander to let lend me the additional money? I'm planning to go in to the branch and speak to someone there but just wanted to know what else I could do.

Any feedback would be appreciated.

[labman]

Re: Santander - Refused Additional Borrowing For Home Improvements

Individual lenders have their own criteria, and they are not duty bound to give you any explanation for accepting or declining your application, however daft it may seem to you.

I think going into the branch is wise. You clearly have an excellent credit record, so on the face of it, it does seem bizarre. It may have something to do with the fact that if accepted, you would be spending 62.5% of your disposable income on the mortgage. This would increase once the two year fixed period is ended, and they may be taking account of that. What would the figures be then?

Go into the branch, and if they are still unable to grant you the additional lending, look elsewhere for it.

[enquirer]

Re: Santander - Refused Additional Borrowing For Home Improvements

I have around £700 per month after paying all bills and mortgage so I can easily afford the £207 extra monthly payment.

It seems to me that the additional payments would actually see you sailing very close to the wind.

I asked him to tell me on what aspect or criteria we didn't meet, but he wasn't able to give me an answer as he's not allowed to provide advice.

He's being evasive. Write to Head Office.

... have also said that they can get me the mortgage with the additional borrowing from other banks easily.

Possibly. On the other hand, it's a good spiel to get your business.

Can anyone please tell me what else I can do or say to improve my chances of persuading Santander to let lend me the additional money?

Hmm. Lending is entirely discretionary - there is no right to a loan.

[labman]

Re: Santander - Refused Additional Borrowing For Home Improvements

It seems to me that the additional payments would actually see you sailing very close to the wind.

As I alluded to above, you would be spending 62.5% of your £700 disposable income on mortgage alone.

If you take that £700, you could reasonably have the following monthly commitments from it:

Council Tax £100
Utilities £100
Car / Travel £100
Food £200
Other (insurances, haircuts, dry cleaning, presents, socialising etc.....) £50

These are all fairly conservative, but would leave you with just £150 per month disposable income.

If you then allow for the increase in rate after the fixed term is ended, how much would then be left? What would happen if you need a new boiler or work on the house etc....?

You begin to see why they might have declined the loan.

[Guest]

Re: Santander - Refused Additional Borrowing For Home Improvements

Did your adviser give you no clue about why the application would be unsuccessful.

Not knowing enough about your circumstances, but there are other reasons that people will not lend, for instance if you mother is the main account holder and here age will take her into her sixties after the new lending is paid some lenders will not advance. I don't know if this applies to you.

Also it is a good idea to get credit reports from all three major agencies as you never know what is on there, just lately there have been many reports of incorrect data being added.

[wales01man]

Re: Santander - Refused Additional Borrowing For Home Improvements

Santander have said NO they will not say why the OP should try somewhere else no use in trying to work out why they said no they aint gonna tell

[labman]

Re: Santander - Refused Additional Borrowing For Home Improvements

Santander have said NO they will not say why the OP should try somewhere else no use in trying to work out why they said no they aint gonna tell

They don't need to tell. There may be a point in trying to work out why they said no though. For a start there may be incorrect data on his CRF which would need addressing. Also, if he is unknowingly overstretching himself, it's in his best interests to know now.

[Guest]

Re: Santander - Refused Additional Borrowing For Home Improvements

They don't need to tell. There may be a point in trying to work out why they said no though. For a start there may be incorrect data on his CRF which would need addressing. Also, if he is unknowingly overstretching himself, it's in his best interests to know now.

Yes in addition repeat failed attempts may damage his credit score even further, far better to find out what if anything is on there.