Mortgage advice declined
mac91
Posts: 1 Newbie
Hi I am a first time buyer who recently applied for a mortgage with my partner we were subsequently declined we have had an offer accepted and I am so stressed by the whole situation.
Property value : 67500
Deposit : 7000
My income : 29300 Experian score 693
Partners income 22700 Experian score 970/999
My debts : 18000 credit card all interest free and 6000 loan
Partners debt : 3000 car loan
I have never missed a payment and my credit score is not horrendous but I am clearly the reason we were rejected they appear to not like my debt levels despite having combined disposable income of around 2000 before any flat costs.
We have decided the best course of action would be for her to apply on her own as her income appears to be ok for the amount requested and she has little debt and a great Experian score.
Her take home pay comes out at around 1400 with fixed outgoings of 344 each month 240 of which are absolute necessity. After taking into account mortgage, council tax, electricity, food, tv license we work out she should have a disposable income of around 500.
- What is your opinion of this affordability and likely approval?
- what should my partner do if they ask if anyone will be living with her or contributing? Naturally I would say tell the truth
- are they lightly to ask why I am not applying with her and is that lightly to effect the application ?
- are they lightly to ask about the declined application and if so what sort of levels of detail should be provided?
- should I go to the meeting with my partner?
This situation is stressing me out so much any advice would be appreciated I want to be completely forward to the lender but at the same time I don't want it to seem suspicious that she is applying on her own?
I also note we are not financially linked on our records other than a joint bank account we have no joint credit.
Property value : 67500
Deposit : 7000
My income : 29300 Experian score 693
Partners income 22700 Experian score 970/999
My debts : 18000 credit card all interest free and 6000 loan
Partners debt : 3000 car loan
I have never missed a payment and my credit score is not horrendous but I am clearly the reason we were rejected they appear to not like my debt levels despite having combined disposable income of around 2000 before any flat costs.
We have decided the best course of action would be for her to apply on her own as her income appears to be ok for the amount requested and she has little debt and a great Experian score.
Her take home pay comes out at around 1400 with fixed outgoings of 344 each month 240 of which are absolute necessity. After taking into account mortgage, council tax, electricity, food, tv license we work out she should have a disposable income of around 500.
- What is your opinion of this affordability and likely approval?
- what should my partner do if they ask if anyone will be living with her or contributing? Naturally I would say tell the truth
- are they lightly to ask why I am not applying with her and is that lightly to effect the application ?
- are they lightly to ask about the declined application and if so what sort of levels of detail should be provided?
- should I go to the meeting with my partner?
This situation is stressing me out so much any advice would be appreciated I want to be completely forward to the lender but at the same time I don't want it to seem suspicious that she is applying on her own?
I also note we are not financially linked on our records other than a joint bank account we have no joint credit.
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Comments
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As far as I'm aware, if you have a joint bank account then your score will affect hers and vice versa. Especially on mortgage applications. I'd probably say the reason for rejection is the 18k debt.
Simplest way to put it is find a way of paying that off first and then if you are getting the incomes that your stating you'll have absolutely no problem in getting accepted for a house of that price.0 -
I would imagine your 24K debt is causing the decline. It's over 80% of your income!!!
Regarding your partner, put their details into some online calculators (including debts) and see what it suggests. I believe lenders will stress test at 7% interest rates on application as well. Some lenders may have an issue with someone else living in the house with a financial interest in the property as well, some may not.0 -
you effectively have no deposit as your debt is bigger than your savings
Your not ready yet to buy a house.
Hit the debt free wannabee forums and crack on with the debt. Don't rush into buying a house, it is a ticking debt bomb"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
Agree with csghogan, you say you have a deposit of £7k but all you've done is borrow it on a credit card ! And what's your plan when the 0% periods ends? You could end up with credit card repayments eclipsing your mortgage which will no doubt be why you were declined.
You are deeply in debt, to the sum of nearly 50% on top,of what you want to borrow, and thus in a very poor position to buy a house from the POV of a lender. You need to be paying these debts off rather than pretending it's all,fine and dandy just because the interest rate is currently zero. It's still money you owe that needs to be paid back and they won't be zero indefinitely.0 -
You need to address the reasons behind the high levels of debt. Any lender will be concerned by your apparent inability to manage your personal finances well. You may never have missed a payment yet. However you are only a pay cheque away from disaster. Unexpected life changing moments can occur at at any time. As has been recommended already. Get over to the DebtFreeWannabe forum and join the club. You'll find that you are not alone. There'll be plenty of support, guidance and encouragement as well.0
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I'm quite surprised the bank is giving an £18,000 credit limit when you earn £30,000 a year? Is that right or did you mean £1,800... my bank gives me £3,750 credit card earning £57,000 a year.0
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If you have multiple credit cards, you can end up with a big credit limit.
Because I haven't closed old credit card accounts down (which I know I should and now will while I'm thinking about it), my total available credit is about £63,000. An extraordinary amount, although my outstanding balance is zero.
Although my salary is quite decent, I still wouldn't actually be able to afford to repay the amount borrowed if I spent the £63k.0 -
looknohands wrote: »I'm quite surprised the bank is giving an £18,000 credit limit when you earn £30,000 a year? Is that right or did you mean £1,800... my bank gives me £3,750 credit card earning £57,000 a year.
The banks must not trust you very well. My salary is MUCH less than yours and I have a £6,500+ limit on the one and only credit card I have with my main bank.
It started off at about £4,800, but as I pay the balance off in full every single month they have been increasing my limit as time goes on.0 -
looknohands wrote: »I'm quite surprised the bank is giving an £18,000 credit limit when you earn £30,000 a year? Is that right or did you mean £1,800... my bank gives me £3,750 credit card earning £57,000 a year.
It may be your bank not trusting you as I earn £25,200 & I have a limit of £4200Dwy galon, un dyhead,
Dwy dafod ond un iaith,
Dwy raff yn cydio’n ddolen,
Dau enaid ond un taith.0 -
It may be your bank not trusting you as I earn £25,200 & I have a limit of £4200
Its probably nothing to do with that, more likely the poster took it out some considerable time ago* and his salary has increased and he hasn't asked to have the limit raised. Also the days of credit card companies proactively raising limits seem to be well gone, I always used to be getting letters to that effect but haven't had that happen for years.
*alternatively its very new and he's still in the "probationary period" of usage.0
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