Mortgage advice

lgirl_2 · 30 April 2008 at 9:11AM

My husband and I are first time buyers and have found a house that we love. We would really like to make an offer but are worried about whether we will be able to get a mortgage so would really appreciate some advice.

He earns £40K and I earn £27k. I have a loan of £8k and £1600 on a credit card and always make my payments on time with no problem (apart from one late payment on the credit card once when I was on holiday). I pay of more that the minimum each month. I think my credit rating should be pretty ok, but not perfect.

My hustband went through a Scottish Trust Deed which started in August 2004 and was completed in August last year. He has since been alowed debit cards etc but we are really worried that this may affect our chances of getting a mortgage in the current climate. He has a student loan of about £2k of which he pays about £50 off a month.

We bank with nationwide so have got a mortgage agreed with them in principal. We can borrow up to £269,000 but only want to borrow £218,000 as we have a 5% deposit (with extra for fees etc) saved. The rate we were quoted was 6.45% for a three year fixed rate mortgage, which we are happy with as we can very comfortably afford the repayments. I have made an appointment to go back this week to formally apply and be credit checked, but this is where we are really worried that we will come unstuck. If we get rejected our chances of finding another lender are probably very slim I would think?? We are now worried that we should have found a broker or independant mortgage advisor first to advise who would most likely give us a mortgage. We are wondering how lenient Nationwide are and if anybody can give us some advise on what the likely outcome would be?

Many thanks in advance!!

MortgageMamma · 30 April 2008 at 9:21AM

Hi There

I doubt very much that Nationwide will accept your application in view of the Scottish Trust Deed. In fact, unless you are using a Nationwide branch in Scotland I would be suprised if the adviser you saw even knew what one was. They are basically the Scottish equivalent of an IVA.

I did one of these for a client back in January 2007 but things have changed a lot since then. The mortgage was with Abbey. They might still do them I don;t know, - I know its very difficult to get an adverse credit through with them if you are borrowing more than 85% of the property value at the minute but it could be worth a shot.

From my perspective I think you need professional advice. The mortgage markets in a very fragile state at the moment, deals are changing (increasing mostly) on a daily basis and it would be difficult for you to navigate that alone. Even us advisers are finding it tough.

Don't be afraid to ask an adviser to look at this for you. You don;t have to sign anything with Nationwide just yet and you still have time on your side.

MM

lgirl_2 · 30 April 2008 at 9:31AM

Hi

Thanks so much for your reply. The branch of Nationwide we used was in the South-East where we live. We did tell the interviewer about the Trust Deed but she said that all we can do is apply and find out. She said not to worry about it until it happens. My guess is that she gets commission for every new product she sells so it would be in her interests for us to at least try with nationwide. We are just so worried that if we are rejected we won't be able to go anywhere else.

Where can we find information about finding professional advice in our area (Surrey)? We really aren't sure where to start?

Thanks!!

lgirl_2 · 30 April 2008 at 12:00PM

Can anyone else give is an indication of the likely hood of Nationwide accepting us due to our circumstances? Many thanks!!

homer_j_3 · 30 April 2008 at 12:13PM

Credit Referencing

You should be aware that all Nationwide mortgage applicants are credit referenced by Nationwide before we produce a mortgage offer usually at Decision in Principle stage.

For your client to be accepted:

the credit reference must cover all addresses for all parties in the last 3 years.
the applicant must not be an undischarged bankrupt
normally there should be no history of a repossession, either voluntary or enforced

This is taken from the nationwide lending criteria.

My experience with NW is that they are fairly forgiving with adverse if the LTV is low. The higher it is the less forgivingthey become.

MortgageMamma has really explained everything that can be explained and so has the NW adviser on the basis that your application will be assessed on more than just your credit score normally so it may go through or may not.

The issue you have is that you do not want to do too many credit searches so you can either go to a proper whole of market broker and if NW is the best deal let them do a Decision in Principal for you and if it fails, your broker can easily look at something else where if you goto the branch, you will have to go and give all your details again somewhere else.

I hope that makes sense to you.

minimike2 · 30 April 2008 at 12:30PM

Nationwide need a 10% deposit now anyway

lgirl_2 · 30 April 2008 at 12:36PM

minimike2 wrote: »

Nationwide need a 10% deposit now anyway

When we saw them yesterday we were given our decision in principal based on a 5% deposit. They have fewer options left but will still offer it as far as I understand? The rate was 6.45%

minimike2 · 30 April 2008 at 12:40PM

Unless they are still doing 95% direct maybe?

I had an email earlier in the week saying they were dropping thier max LTV to 90%

lgirl_2 · 30 April 2008 at 1:34PM

Well, I know it was definitely 95%- not sure what you mean by direct. It was through the branch.

What does LTV mean?

sorry... this is all new to me!!

I'm thinking it would be best to cancel our appointment with Nationwide and find an independant broker to help us. I highly doubt Nationwide will allow us to borrow with the Trust deed history.

Thanks for all replies!!

MortgageMamma · 30 April 2008 at 2:04PM

Just to clarify I believe Nationwide are only reducing LTV's to 90% for broker submitted business. They will still accept the 95% direct business. The SVR has also been removed for broker business but will continue directly. This is just another blatant move to try and freeze out brokers and force their customers to sign away their right to consumer protection.

lgirl. LTV means loan to value. i.e. how much loan you want in relation to the purchase price/valuation of the property.

You are 95% LTV as you have a 5% deposit
someone with a 10% deposit would need 90% LTV
someone with a 15% deposit would need 85% ltv.

Nationwide price their products so that those with more deposit get better rates. If you look at their products the 95% LTV products will be far more expensive than those at 85% LTV

Hope this helps a little. Speak to a broker, will do you more good than harm.

MM

lgirl_2 · 30 April 2008 at 8:45PM

If we were to formally apply beyond our offer in principal for the mortgage with Nationwide and were to get turned down, would all lenders not touch us after a rejection?

Thanks for all help, very much appreciated!!

Mortgage advice

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