Refused Mortgage

WellGirl

I've just been refused a mortgage from my own bank, Bank of Scotland and Im totally gutted.

We sold our house last year and have been renting since. We made a good bit off our house, paid outstanding bills and were standing by until we seen a house we liked, which we have now.

We have a bank loan with BOS, never missed a payment, car loan with BOS, never missed a payment and Ive recently got a BOS credit with a £2000 credit limit. Also have a guaranteed savers account with them with £6000 in it for deposit for a house.

Not had the best credit in the past but for the past year now we have paid on time and only pay out for our rent, car and loan plus the usual bills ie gas, leccy etc.

I thought we would have had no problem in obtaining a mortgage with our bank as our mortgage was with them previous and we never missed a mortgage payment plus what Ive noted above.

Im at a loss as to what to do now. Im totally gutted at not being accepted and no doubt will be refused by other companies now. Ive did the whole check your credit report and although my credit rating is low, all my accounts are now settled.

Any advice?

lisyloo

Unfortauntely there is a credit crunch on right now which means criteria are very tight.
This is unfortunate timing.

Credit history last 6 years, so being good for a year is a good start, but it does not wipe out all the problems.

I know you have seen a house you like, but is it unique?

House prices are currently falling at the fastest rate on record so there are twin reasons to pospone your purchase.

1) There is a high chance that prices will fall further. There are no guarantees but I think it's very highly likely given the economic issues around at the moment. So as you wait, prices will fall further and you will save money.
2) Each month you carry on paying your bills on time, your credit report should improve further.

Try not to take it personally as the credit crunch is global and not personal.
I know you like this house, but is it really unique or do you think if pries dropped you might be able to get something as nice or quite possibly nicer.

Paulos77

Look around with other mortgage lenders. Just because bank of scotland refused doesnt mean everyone else will.

Im a first time buyer and its hard for me, I went to see a mortgage advisor and was turned down by a quite a few but I managed to get one. Not as good a deal as the first one I wanted but its not a bad deal though.

hostman

£6000 isn't a huge deposit for a house these days. Is that all your deposit for the house, or do you have more elsewhere?

What would the LTV have been on the new house?

Do you have anything outstanding on the credit card?

WellGirl

Im kinda scared to keep applying as I realise this makes your credit rating worse. If we pay £6000 then we would need a £114000 mortgage. We could if we held off longer be able to put maybe another 2k on top of that, however, that would be using all our savings which Im reluctant to do.

I have no outstanding monies on anything other than my loan and car.

hostman

I suspect its the small deposit + previous history which will be going against you.

Ideally you will need at least 10%.

WellGirl

Just shows you how things have changed - I started off on a 100% mortgage!

hostman

WellGirl wrote: »

Just shows you how things have changed - I started off on a 100% mortgage!

Thankfully those are long gone. Easy credit was the cause of the housing boom.

indyjourno

Hi WellGirl

I'm writing a piece about the credit crunch and I was wondering if you'd like to talk to me about your problems getting a mortgage? It won't take long, about 10 minutes on the phone (I'd call you).

What do you think? You can email me on [EMAIL="e.walker@independent.co.uk"]e.walker@independent.co.uk[/EMAIL].

Esther x

ixwood

You sold your house, yet still have a car loan, another loan and a very small deposit. I'm not surprised you're struggling to be honest. The loans suggest you're living beyond your means to me.

Maybe keep saving and paying down those debts while the market keeps dropping and try again in a year or 2?

ixwood

I hope she'll get paid for looking like a mug for some light entertainment.