Urgent help required!

mickeyfinn1

Our fixed rate ended with Future Mortgages in March. We took out a new product with the Nationwide in March for £232,000 - we were approved for a mortgage with them at that point to a value of £530k. We have now sold our house for £249,950 (bought it for £242k) and want to port our Nationwide product to a new house which is £135,000. My husband & I earn £46,500 each per annum, £93k in total excluding any bonus. We want to borrow £127,000 for the new house and put down £8k deposit.

Nationwide are happy to port the product but credit scored us and we came back as poor so they declined!

There has been no negative financial change to our circumstances since we applied to them in February, we have both had small pay rises since then, and when I checked our credit score with Experian all that flagged up is a late payment to a mobile phone company which was the phone company's mistake and is being rectified.

I called Experian and they said that when you take out a new mortgage your rating automatically drops for a period of time until a payment history is established. We have no other debt or anything that could negatively affect our score.

Nationwide say they could appeal which would take 3-6 weeks for an answer but buy then we will have missed out on the house we want to buy. They also suggested that we run an applicatioon in one name only to see if that makes a difference but I am scared to have too many credit checks on our file. They say they would need to run a full credit score on an individual application as the current information they have just searched for is in joint names.

We don't know what to do! If we apply elsewhere we are likely to be declined as our rating is currently graded "poor" due to taking out a new product and even if we got a mortgage elsewhere we would have early repayment fees to pay of £5k.

I feel that Nationwide are treating us terribly as they are penalising us for taking out a product with them.

Any advice? We need to get this sorted asap as the sellers want us to exchange contracts in 4 weeks from now and move end of July which fits in fine with our buyers (who are cash buyers) but I am terrified to sign anything until we know we have a mortgage.

Thanks in advance

Robert_Sterling

mickeyfinn1 wrote: »

I am terrified to sign anything until we know we have a mortgage.

You are right to not sign anything until you are certain about your mortgage.

luckyfool

The fact that you were approved previously to a mortgage for £530k is irrelevant, that is based purely on income. The fact that you are "failing" a score now is probably related to them requiring a very high score to lend 95%. If you had a bigger deposit to put down I suspect you would have gotten a different answer.

mickeyfinn1

At the time they were running the decision in principle I said we had a minimum of £7k deposit but if required up to £14,500 depoist, the girl said it made no difference as we had been scored "poor" on the credit rating. We really need some advice on what we can do next.

We will not be signing up for the new place until we have this mess sorted out but it seems so unfair that a new mortgage with Nationwide is what has reduced our credit score from good to poor and the Nationwide are holding that against us when there is nothing else holding us back.

luckyfool

A new mortgage with Nationwide is almost certainly not the only thing holding you back. You sold your house for just under £250k . . . how much is your current mortgage and what percentage of £250k is it? I am certain that you did not remortgage to Nationwide in March 2009 for 95% (not least because they would not offer a remortgage on those terms), and suspect it was at 80-85% or even less. The credit score required back then was probably looser, and it was probably for a lower risk loan to value (hence requiring a lower score).

Poppy9

Can you get together a much bigger deposit to buy intially and then remortgage in a few months time if you have to borrow the money from family/friends.

mickeyfinn1

We took out a 100% mortgage in December 2005 with Future mortgages for £242k.

The new mortgage in March this year with Nationwide is for £232k, I make that to be 93%.

Nothing financially has changed for us to affect our credit score from February 2009 until now apart from taking out this new mortgage which we specifically went for as it was portable.

mickeyfinn1

Hi Poppy9, We were told that Nationwide are happy to offer mortgages of 95%, we told them we could put down up to 11% deposit but they said it was fine with the 5%. We would rather do this alone if we can.

luckyfool

mickeyfinn1 wrote: »

Hi Poppy9, We were told that Nationwide are happy to offer mortgages of 95%, we told them we could put down up to 11% deposit but they said it was fine with the 5%. We would rather do this alone if we can.

I'm flummoxed, as at least to my knowledge Nationwide have not offered 95% (except to existing mortgage customers moving home) for quite some time.

mickeyfinn1

Hi Luckyfool,
The valuer for Nationwide valued our house at £280k in February this year, would that make a difference? Anyway, that is for the old house which is sold. When I called about porting they said the minimum deposit required for the new house (£135k to buy) is 5% - £6750. We said we could put down up to £14500 but would rather put the minimum down if we could. The girl said that was fine.

Poppy9

mickeyfinn1 wrote: »

Hi Poppy9, We were told that Nationwide are happy to offer mortgages of 95%, we told them we could put down up to 11% deposit but they said it was fine with the 5%. We would rather do this alone if we can.

Perhaps the CSA was mis informed in telling you this. I would reapply with the larger deposit and if necessary I would borrow from family as you are both on decent incomes so could repay them quickly with a bit of discipline.