FTB- Panicing over being turned down- advice pls?

aKtechno

Hi guys,

I'm a young FTB in a bit of a panic, any advice appreciated.

After much research I plucked up courage to complete online application for 90% LTV fixed rate with Post Office. (Even the brokers couldnt beat it!).

Despite a clean credit history, great employment (£45K), 10% deposit savings etc I got a declined decision informing me, my application does not meet the lending criteria.

Now, although I don't know which property I want yet... hence mortgage in principle to start looking, I put down age of property as less than 12 months old. (I am keen to look at new builds).

After doing a search I have found advice on their website under general lending criteria:

"Properties built within the last 12 months, or that are being purchased for the first time since conversion are acceptable up to 75% LTV. Please note that for buy-to-let mortgages, we do not accept flats or maisonettes built within the last 12 months or being purchased for the first time since conversion"

I am guessing this means that my research was flawed and I should have noticed that on properties (even houses) that are less than 12months old they will not do 90% LTV. (angry that application process did not pick up before credit check!)

I am a little disheartened.

• I am concerned that this decline decision will impact my credit score and make chances of another application going through less likely.

• Also it means that I need to go back to the drawing board with my research and find another 90% LTV deal that lenders will accept on new houses.

Please can anyone give me some advice. I am feeling so disappointment. I wanted to and was excited to go and view some properties this weekend.

Anyone been here before?:(

paul4788

My advice is find a good mortgage broker. The post office are using Bristol and West (I think) and frankly they dont want to lend any money!

Although the rate is important its more important, especailly for a first time buyer, that you find someone actually pepared to give you some money. A good mortgage broker will kno this. Try and find one that doesnt charge fees, there are plenty around, and they should be able to help you accordingly. That way you can also avoid several credit references.

I'll check rates tomorrow for you and post something to help you in the meantime. Its also worth pointing out theres very little around at the moment even with a 10% deposit, but thats not to say it cant be done.

Good luck

aKtechno

Thanks Paul! I'll get onto the brokers again tomorrow and look forward from hearing your findings.

At the moment I am seriously re-evaluating whether my first home needs to be a new build. I think I may need to lower my expectations.

Everyone I talk to says that I am in a good position financially. Here is some more info that might help/encourage any more advice.

Salary £40K, employed for 5 yrs
Age- 27
Deposit Saved: £15K plus £3K extra for fees and legal.
No regular outgoings other than £150 a month on student loan
Currently living with parents
Immaculate credit score

What I am looking for is a modern/trendy house, not flat in the region of £145K-150K.

dimbo61

look for a small house thats 5/10 years old in your price range and save £1000 a month while you find what you want and sort out a mortgage.
If you can save a £1000 a month then you should be able to pay the mortgage and all the other bills !!!!
Think long term 3/5/7 year fixed deals to give you security and consider renting a room to give you extra income ! GOOD LUCK

paul4788

As promised some suggestions.

The best rates are I'm afraid not brilliant. The best is 6.59% with C and G but due to their problems they are really tightening up on their underwriting procedures so you may encounter the same problem as you did with Bristol and West.

Other than that there is Abbey @ 7.09% wih a hefty fee, they most likely will do it, as will RBS @ 7.25% and Halifax @ 7.49%.

The only other company I can think of is Nottingham. Your broker won't have this and it isnt widely known, but they will even do a mortgage up to 95% but you can only do this at a branch.

Good luck and hope this helps.

beecher

If you save £1000/month for the next 7 months or so you'll have a 15% deposit which should make a difference. Hopefully prices will come down too. Now's not the time to buy in my opinion.

aKtechno

Thanks for coming back to me Paul!

Ok so this morning I got a call from the bristol and west, underwriters confirming that the decline decision was due to me selecting new builds.

I asked them to change to "older than 12 months" and they confirmed my approval in principle.... woooo hooooo.... This means that I am not a financial screwup and they will lend me £.

The post office are hiking there rate to 6.02% from Monday. Which is still not bad, in comparison to some of the other rates out there. I hope to find a house this weekend but not end of the world if I cant and am forced to take the new interest rate.

I have taken a look at some newish/modern houses today. There are some potential reposessions in the nice areas of northampton that look tasty, I will let you know how I get on.

Beecher- I totally hear you, but I've been chasing my first house for sometime now. As soon as I got 5% deposit, I needed 10%, by the time I get to 15% it will be 20%. It's one of those now or never scenarios where I feel that I just need to commit to doing it or it will never happen. Thanks for the honest advice though.

koexelek

Your best bet on a brand new property at 90% ltv is RBS

aKtechno

Went house hunting today.... seen a REALLY nice repossesion that last sold at £200K in a really desirable area.

Unfortunately I have to play the waiting game as it is not even on the market yet.

The estate agent has valued it a £150K but 2 independant valuation still need to be done next week.

£150K is my max budget.

Are there any estate agents out there or anyone gone through this before that can provide useful advice? Not sure what the process is/agreement between repossesors and the estate agent. They may tell me porkys in a bid to make me come up with asking price offer as soon as they have it.