Mortgage Denied - Advice Needed Please

patchwork_cat

Personally I wouldn't be touching a 2 year fix. The 4.99 is current SVR is that right?

Skyler

patchwork_cat wrote: »

Personally I wouldn't be touching a 2 year fix. The 4.99 is current SVR is that right?

Yes that's what it said on the Key facts statement.

Why wouldn't you go for the 2 year fixed? Is it just because of the probablility of interest rate increases?

We had a maximum budget for the mortgage of £700 a month as I considered that anything above that wouldn't be affordable. The 2 year fixed rate came in at £703.

patchwork_cat

I think that the market is going to be seriously up in the air in 2 years and better to get a longer fix and let it settle. You may find that in 2 years your rate that you currently think is 4.99 will be 7.99 and rising fast. Yes a longer mortage would cost more in the short term, but with the market how it is I think it is a gamble worth taking. 3.99 for 2 year fix doesn't seem sucha good deal to me. Eg First Direct offset tracker is 2.99 2 year fix. YOu are paying a premium for a product with no costs or v little, also at just above the magic 65%LTV

rlc22

patchwork_cat wrote: »

I am not a mortgage advisor, but someone similar to yourself who has used L&C last time and approached them this tiem, too. I am afraid that I don't rate their advice. Our advisor is very uncontactable and whilst they say they are whole of market they will not tell you about, HSBC, YBS , First Direct and a few more. That is because they don't get commission of these banks. As a result we were not offered the 2 best deals in our very specific criteria. Although I am regretting my descion to go to YBS as they seem to be particularly poorly staffed, with forms filled in by them incorrectly and members of staff themselves making policy!!

To be fair, HSBC and First Direct don't deal with any brokers at all AFAIK so if the OP is interested in either of these companies then they will have to approach them directly.

Skyler

patchwork_cat wrote: »

I think that the market is going to be seriously up in the air in 2 years and better to get a longer fix and let it settle. You may find that in 2 years your rate that you currently think is 4.99 will be 7.99 and rising fast. Yes a longer mortage would cost more in the short term, but with the market how it is I think it is a gamble worth taking. 3.99 for 2 year fix doesn't seem sucha good deal to me. Eg First Direct offset tracker is 2.99 2 year fix. YOu are paying a premium for a product with no costs or v little, also at just above the magic 65%LTV

A procuct like that probably wouldn't be on offer for me though due to my circumstances.

At the moment it's looking like I won't even get a mortgage. To say I'm worried is a massive understatement

Trollfever

Skyler wrote: »

Why?

We have been viewing properties at different estate agents and each offered an appointment with their financial advisors. So we took them up on that offer and went to get some advice with regards to our situation.

Sorry perhaps I should have been more specific and not used the term Mortgage adviser.

Four different professional financial advisors have said Yes.
But computer has said No.

Still seems strange to me.

eschaton

You have built up £28k debt and only able to pay it back via a property sale. Servicing debt is fine but you have demonstrated no ability to pay this back.

The banks may be thinking what if you build up this debt again.

I also earn £35k, when I got my mortgage 3.5yrs ago for £115000 I was on £33k. Nationwide knocked me back and would only give me £109500, First Active gave me £115000 and would have went up to £122000.

That was with no debt and no dependents so I think £147000 on only your income is maybe seen as a bit much, especially with depedents.

Skyler

Trollfever wrote: »

Four different professional financial advisors have said Yes.
But computer has said No.

Still seems strange to me.

Strange in what way? I've explained my financial situation on here to try and understand why the 'computer said no' but all the financial advisors have said it shouldn't be a problem. I didn't think it was a problem at first as our application was passed straight through to the underwriters.

One of the financial advisors said that some lenders may want to stipulate that as a condition of mortgage offer they would need proof that we were clearing our debts and closing our credit accounts so we didn't have any further access to the money, which of course wouldn't be a problem as that is what we are planning on doing anyway.

That was the only problem that we were advised might happen.

Both myself and my husband have checked our credit score and reports. The only thing that is adversely affecting them is that the value of outstanding credit that we have is high. We have NO missed payments, NO defaulted accounts, NO CCJ's and we have had less than 2 searches made on our credit file in the last 6 months. My husbands score was in the excellent category and mine was fair.

What would you suggest is a reason why the computer is saying no then but all the advisors are saying yes??

Skyler

eschaton wrote: »

You have built up £28k debt and only able to pay it back via a property sale. Servicing debt is fine but you have demonstrated no ability to pay this back.

The banks may be thinking what if you build up this debt again.

I also earn £35k, when I got my mortgage 3.5yrs ago for £115000 I was on £33k. Nationwide knocked me back and would only give me £109500, First Active gave me £115000 and would have went up to £122000.

That was with no debt and no dependents so I think £147000 on only your income is maybe seen as a bit much, especially with depedents.

I understand your point however you are factually incorrect in your statement.

I have £14k on credit cards which yes admittedly I am paying the minimum payment at the moment. I have a £14k bank loan which is being paid off which has an end date so I am paying it back each month.

I have been on maternity leave for 9 months and prior to that we were saving enough money to ensure I could cover my bills whilst I was off so I could spend time at home to look after our baby.

We thought it better to build up savings rather than worry about how we were going to pay the bills whilst I was on Maternity leave.

Also, if we weren't selling the business the debt would be being paid off when I go back to work. I was able to save around £900 a month prior to my maternity leave which I would have again once I go back to work full time. So if we weren't selling I would be reducing my CC debt by £900 a month therefore, I would be paying it back

We aren't selling just to pay off debt. We aren't financially overstretched at the moment. To still have £900 a month left from my salary (when I go back to work) isn't bad. That obviously doesn't include the money that my husband makes.

eschaton

Skyler wrote: »

I understand your point however you are factually incorrect in your statement.

I have £14k on credit cards which yes admittedly I am paying the minimum payment at the moment. I have a £14k bank loan which is being paid off which has an end date so I am paying it back each month.

I have been on maternity leave for 9 months and prior to that we were saving enough money to ensure I could cover my bills whilst I was off so I could spend time at home to look after our baby.

We thought it better to build up savings rather than worry about how we were going to pay the bills whilst I was on Maternity leave.

Also, if we weren't selling the business the debt would be being paid off when I go back to work. I was able to save around £900 a month prior to my maternity leave which I would have again once I go back to work full time. So if we weren't selling I would be reducing my CC debt by £900 a month therefore, I would be paying it back

We aren't selling just to pay off debt. We aren't financially overstretched at the moment. To still have £900 a month left from my salary (when I go back to work) isn't bad. That obviously doesn't include the money that my husband makes.

I don't think I am factually incorrect. Whether you were saving or not before maternity leave you still built up £28k debt which meant you spent £28k more than you earned.

Hope it all works out for you but looking in from the outside I think the bank sees a risk.

Personal finance is something I am very close to so can see things quite closely if you know what I mean.

When I had £30k of credit card debt I had over £55k in the bank to cover it.