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  • FIRST POST
    • mac91
    • By mac91 12th Oct 16, 1:06 AM
    • 1Posts
    • 1Thanks
    mac91
    Mortgage advice declined
    • #1
    • 12th Oct 16, 1:06 AM
    Mortgage advice declined 12th Oct 16 at 1:06 AM
    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.
Page 1
    • Chrism899
    • By Chrism899 12th Oct 16, 2:12 AM
    • 12 Posts
    • 2 Thanks
    Chrism899
    • #2
    • 12th Oct 16, 2:12 AM
    • #2
    • 12th Oct 16, 2:12 AM
    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.
    • mortgageFTB
    • By mortgageFTB 12th Oct 16, 7:07 AM
    • 87 Posts
    • 77 Thanks
    mortgageFTB
    • #3
    • 12th Oct 16, 7:07 AM
    • #3
    • 12th Oct 16, 7:07 AM
    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.
    Last edited by mortgageFTB; 12-10-2016 at 7:25 AM.
    • csgohan4
    • By csgohan4 12th Oct 16, 7:56 AM
    • 2,518 Posts
    • 1,563 Thanks
    csgohan4
    • #4
    • 12th Oct 16, 7:56 AM
    • #4
    • 12th Oct 16, 7:56 AM
    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
    • AnotherJoe
    • By AnotherJoe 12th Oct 16, 8:35 AM
    • 4,096 Posts
    • 4,129 Thanks
    AnotherJoe
    • #5
    • 12th Oct 16, 8:35 AM
    • #5
    • 12th Oct 16, 8:35 AM
    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.
    • Thrugelmir
    • By Thrugelmir 12th Oct 16, 9:14 AM
    • 51,207 Posts
    • 42,984 Thanks
    Thrugelmir
    • #6
    • 12th Oct 16, 9:14 AM
    • #6
    • 12th Oct 16, 9:14 AM
    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.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • looknohands
    • By looknohands 12th Oct 16, 9:18 AM
    • 353 Posts
    • 163 Thanks
    looknohands
    • #7
    • 12th Oct 16, 9:18 AM
    • #7
    • 12th Oct 16, 9:18 AM
    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.
    • Canary_Yellow
    • By Canary_Yellow 12th Oct 16, 9:42 AM
    • 37 Posts
    • 6 Thanks
    Canary_Yellow
    • #8
    • 12th Oct 16, 9:42 AM
    • #8
    • 12th Oct 16, 9:42 AM
    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.
    • benten69
    • By benten69 12th Oct 16, 9:50 AM
    • 226 Posts
    • 1,243 Thanks
    benten69
    • #9
    • 12th Oct 16, 9:50 AM
    • #9
    • 12th Oct 16, 9:50 AM
    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.
    Originally posted by looknohands

    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.
    SPC9 #408 - £200.39 | SPC10 #408 - £95.69
    3-6 Month Emergency Fund Challenge #62 - 53% Complete
    Mortgage Sept '15: £161,250 | Oct '16: £157,050.37

    • Oakdene
    • By Oakdene 12th Oct 16, 9:51 AM
    • 500 Posts
    • 677 Thanks
    Oakdene
    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.
    Originally posted by looknohands
    It may be your bank not trusting you as I earn £25,200 & I have a limit of £4200
    • AnotherJoe
    • By AnotherJoe 12th Oct 16, 10:04 AM
    • 4,096 Posts
    • 4,129 Thanks
    AnotherJoe
    It may be your bank not trusting you as I earn £25,200 & I have a limit of £4200
    Originally posted by Oakdene
    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.
    • muhandis
    • By muhandis 12th Oct 16, 10:09 AM
    • 204 Posts
    • 81 Thanks
    muhandis
    Answering the questions you've asked -

    - What is your opinion of this affordability and likely approval?

    You need to meet a broker before doing anything else with all details of your monthly outgoings servicing debt, credit card balances, travel costs, etc. The advisor will be able give you a definitive answer on whether there is a realistic possibility of getting a mortgage or not. If you don't want to do that - check out the detailed affordability calculators on the internet, Google Nationwide or Santander for intermediaries affordability calculator to get a rough idea of what they *might* consider lending.

    - what should my partner do if they ask if anyone will be living with her or contributing? Naturally I would say tell the truth

    Be honest.

    - are they lightly to ask why I am not applying with her and is that lightly to effect the application ?

    Not sure about this, hopefully one of the advisors on this thread will know.

    - are they lightly to ask about the declined application and if so what sort of levels of detail should be provided?

    They will be able to see this on your credit report.

    - should I go to the meeting with my partner?

    I would go through a broker and there's no harm in accompanying her there.

    Speaking as someone who isn't in your shoes, what I would do in your place is -

    - Reconsider whether I should buy a house for the next year.
    - Work towards reducing or paying off my other debt first and 0% credit cards next.
    - After a year go meet a broker and see what they say about how much you two together can borrow so you have a budget and then get a decision in principle before looking for a house to buy

    Good luck.
    Last edited by muhandis; 12-10-2016 at 12:00 PM.
    • benten69
    • By benten69 13th Oct 16, 9:04 AM
    • 226 Posts
    • 1,243 Thanks
    benten69
    ItAlso 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.
    Originally posted by AnotherJoe
    My bank just raised my limit by about an extra £1000 in the last 6 months without me asking.....
    SPC9 #408 - £200.39 | SPC10 #408 - £95.69
    3-6 Month Emergency Fund Challenge #62 - 53% Complete
    Mortgage Sept '15: £161,250 | Oct '16: £157,050.37

    • Nebulous2
    • By Nebulous2 13th Oct 16, 10:27 AM
    • 1,267 Posts
    • 730 Thanks
    Nebulous2
    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.
    Originally posted by AnotherJoe
    Mine have started again. I've had three increases this year. Two of them on fairly recent cards, but one is a longstanding Barclaycard. It has had the same limit since before the credit crunch but has been put up this year.

    Sometimes I have had to phone to say I want it, after receiving a letter offering an increase.
    • MEM62
    • By MEM62 13th Oct 16, 11:00 AM
    • 953 Posts
    • 623 Thanks
    MEM62
    Credit scores are irrelevant. CRA's do not lend money.

    The issue is your debt. It is very high in relation to your income and I doubt you will pass the affordability checks. If you partner can obtain the mortgage on her own that would be the way to go. The fact that you will be living there does not mean that you must be on the mortgage.

    If you partner has no other debts she should qualify for the mortgage based on her salary. You need to speak with a decent independent mortgage broker.
    • kingstreet
    • By kingstreet 13th Oct 16, 11:07 AM
    • 30,009 Posts
    • 15,954 Thanks
    kingstreet
    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.
    Originally posted by mac91
    Direct or broker?

    Which lender?

    Assuming no broker, speak to one today. Independent/whole of market and no-one from a corporate estate agency chain.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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