Mortgage woes...

epebble · 2 March 2006 at 8:43PM

Hello Everyone,
New to this forum and having a bad day - wonder if anyone has any advice they can offer...
My fiance and I decided to take the plunge and buy a house we saved £9100 for a deposit and phoned a broker (recommended on this website) to ask what kind of region of house price we could look for. Based on our salaries he said somewhere in the region of £225,000. We found a house and had an offer accepted on £182,000 (conveniently our deposit is 5%). We then asked our broker to find us a mortgage, he did, we applied, we were DECLINED!!!!!
We are devastated... Our broker can only imagine it is because of a "lack of credit history", the only options are 1. Come up with a 12% deposit (an extra £13,000) or 2. attempt an Intelligent Finance Mortgage at a higher rate?
Has anyone had a similar problem? What did they do?
Any help will be much appreciated!
Thank you,
epebble
I should probably add we are first time buyers (in our late 20s, with very secure, well paid jobs)

herbiesjp · 2 March 2006 at 9:19PM

Who declined your application?

Were they charging a Higher Lending Charge? IF may be a higher rate but they do not charge a HLC.

Difficult to give any more guidance without more details - have you got copies of your credit files from Equifax or Experian?

epebble · 2 March 2006 at 10:06PM

It was Bristol & West and they didn't charge a higher lending charge. My fiance has spoken to our broker again and he said that he would like to tell us it isn't a mortgage refusal, B&W will lend us £162,000, hence the new 12% deposit. I have no idea who Equifax or Experian are, so I will google and find out. If they are a credit search company, will are "lack of a credit rating" become a poor credit rating because we've tried to find out more?
epebble

luckyfool · 2 March 2006 at 11:28PM

epebble - If your loan size or ltv was restricted by B+W I would probably not try Intelligent Finance as they may well do the same. Assuming there is no actual adverse credit there but really more of a lack of positive credit information I would probably be looking at LTSB/C&G who would offer reasonable rates, HLC free @ 95%.

Barney088 · 3 March 2006 at 12:49AM

Bristol & West have a tight underwriting process so it depends what they have seen and what the credit search shows. It's almost impossible to second guess what a credit score will show with any lender.

I would be interested to know why they came up with the figure, Credit scores will tell a lender's underwriter that the computer says yes, or no. The computer will rarely say you can borrow £X. You scenario is £162K on £182K, this is not a sensible credit score response, the computer works in blocks of 5%, so in your case, £163800 would be sensible, or 90% loan to Value.

I guess that some Underwriter has taken a good look at your file and decided to reduce your borrowing. You need to get your broker to find out why, if needs be speak to the underwriting manager, they normally are human. My guess is there is a reason, or in many cases, a missunderstanding.

What can you tell us about the following?

Income - how is this made up? Do you get a nice large basic or is it made up of overtime/bonus/comission?

Loans - Have you got any as these will effect what level a lender willl give you

Bank statements - have they seen these yet? WHat are they like? In credit, bounced payments etc?

There are many things that it could be, without talking to Bristol & West it will be impossible to second guess. They are a good lender, I've got them to use common sense from time to time but it is hard work.

Never say never until the MD confirms it in writing.

roswell · 3 March 2006 at 2:32AM

A tip to increase your credit rating although it wouldnt work imediately is get a credit card buy a packet of chewing gum (or similar small item) and pay it off, cut the card up and over the months it will report back as settled every month.

Although make sure you get a small limit so it does take up to much of your "Available credit allowance"

epebble · 3 March 2006 at 8:32AM

Barney088, Just to tell you more regarding the information you asked for I have a very secure job I earn approx 34000, my fiance earns £29000 (his job is also very secure). My fiance has no loans at all EVER, I am halfway through paying off student loans (still owing approx £3000), we owe £4000 on 2 credit cards (one in my name, one in his). I took out a bank loan to do my postgraduate degree of £6000, I only have £200 left to pay on it (one more month and it'll be gone). We have not missed payments (except in the very early days of my student loan - now 5 years ago).
Gosh I've given my life away now

I will speak to my broker again... Thank you very much for your advice.
epebble

epebble · 3 March 2006 at 8:43PM

:j :j :j :j :j
Luckyfool - you are a genius!
I decide to phone C&G on the off chance - and SORTED! No problems whatsoever, they've offered us exactly what we wanted, although the rates aren't as good (they aren't that bad either). It was all so quick, it's their first time buyer deal with no higher lending charge - and my fiance and I are thrilled to bits.
A BIG THANK YOU TO YOU AND EVERYONE WHO REPLIED!!!!!
epebble

luckyfool · 7 March 2006 at 2:02AM

epebble wrote:

:j :j :j :j :j
Luckyfool - you are a genius!
I decide to phone C&G on the off chance - and SORTED! No problems whatsoever, they've offered us exactly what we wanted, although the rates aren't as good (they aren't that bad either). It was all so quick, it's their first time buyer deal with no higher lending charge - and my fiance and I are thrilled to bits.
A BIG THANK YOU TO YOU AND EVERYONE WHO REPLIED!!!!!
epebble

Glad I could help ;-)

Mortgage woes...

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