I just dont know what to do anymore

sarahripper

I am a first time buyer and I applied for a mortgage and was told i could have a 90% ltv, so i then put in an offer on £107000 a house which was accepted needing a deposit of £10700 which I had. I then contacted the bank to finalise the mortgage and was told that i'd failed credit checking and to get a copy of my report which I did, there are no late/missed payments etc on there. The bank told me to fax a copy through which i did and now they have offered me an 85% ltv mortgage (£90950), leaving me with a deficit of nearly £7000 which they suggested I raise by getting a personal loan. I applied for a personal loan this morning and got turned down.

Why am i getting turned down when my credit report shows nothing wrong?

If I can't raise the extra by a personal loan is there anything else i can do?

I am at the point of giving up on the idea of ever buying a house - if someone with a 10% deposit and clear credit history cant get a mortgage its not surprising that people cant get on the housing ladder.

I am at the breaking point at the moment, if anyone has any ideas, please let me know. Thanks

BlameTheGame

Try elsewhere for a mortgage or lower your offer?

kunekune

I'm sorry you're getting the runaround - sounds like the bank doesn't know what its other hand is doing.

The response you will get from most on here is that 10% is not a big enough deposit, and that if you wait, you will have more of a deposit and prices will have come down. And to some extent that's true - most of the good deals require more than you have at the moment. That's what the credit crunch is about - it's unusually hard to get credit, and the banks are seizing on the slightest thing as a hook to turn you down on. The idea of a personal loan is truly weird though: it's unsecured, unlike a mortgage, so surely it's not in the bank's interests. If you could afford it, it could actually be in yours! On the other hand, if you can afford that extra £7000 loan, maybe it wouldn't take too long to get that deposit up to 15 or even 20% ...

But I do feel for you (and for the people who are trying to sell you the house) because you did go and check, it wasn't an irresponsible offer, and you don't know why they've changed the rules on you.

sarahripper

Thanks kunekune - I am getting married on 1st August and really wanted to have a house by then which is why we had saved 10% and were starting to look now so that we could settle in before the choas. We are managing to save around £750 a month at the moment both living at home with our own parents so would have another £4500 by the time we get married, however this still wont be enough for even the cheapest houses round here and also relies on finding a house right on top of the wedding, otherwise we will have to rent, as we cant live at home when we are married, with average monthly rents of around £850pcm which will quickly deplete the deposit we will have saved up.

Sorry to go on - I know there are loads of people in my situation.
Thanks for the support

Lotus-eater

I know its not ideal,(not much is atm) but IF you can manage to live at your parents for a while, or at least plan to, then you can be ready to move out a moments notice, still save maximum amounts of money and apart from the living arrangments, be in a pretty good place.

Its not nice living with your parents when you first get married, but then its not nice buying a house that will take your deposit and swallow it, losing value for the first year of your marriage either, or getting a mortgage or personal loan that is going to cost you more than it should.

sarahripper

If we could we would however there isnt room at either of our parents houses to live together and living apart has been a hard option which we have gone with to save the 10% deposit already - we just couldnt live apart once we get married! Good suggestion though!

macaque_2

sarahripper wrote: »

I am a first time buyer and I applied for a mortgage and was told i could have a 90% ltv, so i then put in an offer on £107000 a house which was accepted needing a deposit of £10700 which I had. I then contacted the bank to finalise the mortgage and was told that i'd failed credit checking and to get a copy of my report which I did, there are no late/missed payments etc on there. The bank told me to fax a copy through which i did and now they have offered me an 85% ltv mortgage (£90950), leaving me with a deficit of nearly £7000 which they suggested I raise by getting a personal loan. I applied for a personal loan this morning and got turned down.
Why am i getting turned down when my credit report shows nothing wrong?
If I can't raise the extra by a personal loan is there anything else i can do?
I am at the point of giving up on the idea of ever buying a house - if someone with a 10% deposit and clear credit history cant get a mortgage its not surprising that people cant get on the housing ladder.
I am at the breaking point at the moment, if anyone has any ideas, please let me know. Thanks

I prevail on you to take a disspationate view of what is going on. There is a good reason why lenders are behaving like this. If you go onto the website one well known lender, you will find their better offers are restricted to 60% loans. This means that the economists in these organisations are factoring in further market falls of up to 40%.

People who were in your position a year ago are now mired in debt and bitterly regretting their decision to buy.

On a day when more job losses were announced and big fall in house prices published, I find it hard to understand why you are so hell bent on putting your head in the noose.

In order to get the housing market back into equilibrium, prices need to get back to more rational levels (3.5 times earnings). Given that salaries are also falling, we still have a long way to go.

Robert_Sterling_3

I agree with Macaque.

sarahripper

macaque wrote: »

I prevail on you to take a disspationate view of what is going on. There is a good reason why lenders are behaving like this. If you go onto the website one well known lender, you will find their better offers are restricted to 60% loans. This means that the economists in these organisations are factoring in further market falls of up to 40%.

People who were in your position a year ago are now mired in debt and bitterly regretting their decision to buy.

On a day when more job losses were announced and big fall in house prices published, I find it hard to understand why you are so hell bent on putting your head in the noose.

In order to get the housing market back into equilibrium, prices need to get back to more rational levels (3.5 times earnings). Given that salaries are also falling, we still have a long way to go.

So you think it is better to waste money renting loosing in effect £800-£850 a month on rent than to try and buy a house with mortgage payments of around £550-£600?

mlz1413

OP if its the living together that is the main point then could you rent a room? I used to rent a room in a large 3 bed house, a couple had the main bedroom and me and single male rented the single bedrooms. We sorted out a rota for the bathroom in the morning and it worked ok.

It's not ideal as many of these places are houses of multi occupancy but its cheap, the rent normally includes all the bills as in heating, hot water, insurance and rates, this means you can keep looking for a house without eating into your deposit.

macaque_2

sarahripper wrote: »

So you think it is better to waste money renting loosing in effect £800-£850 a month on rent than to try and buy a house with mortgage payments of around £550-£600?

Of course its better to be renting. Properties are a massive financial liability at the moment. If you had bought in November you would have lost £2000 last month and £2500 in December. Over the next 2 years, you could lose a further £50,000.