Confused about possible Mortgage Decline

Colz

Hi All,
Is there anyone around that can offer me some advice. My wife and I both went to a Mortgage Broker yesterday in order to get an agreement in principle so that we can buy a house (We are in our mid-thirties and are first time buyers). As she has not worked for a couple of years most of the income that was put down comes in from me and therefore I was the main applicant and she was the second.

I have had a really bad time in the past and got quite into debt with rent, credit cards etc and had defaults and also 1 x CCJ (£300), however, these are all starting to fall off my credit file as they are around five/six years old. I have paid all these off now and also been on top of all my bills and repayments for the past three years.

After the mortgage advisor ran us through a credit check, he came back to me and told me that there was nothing adverse that had come up at all and to that respect we both had "clean" credit files. I know this to be the case as we looked at them before we went ahead with this.
However, our combined credit score was low due to the fact that we have no credit cards and that if we want to increase our score we would need to BOTH get a loan or Credit Card in order to be passed.
We both have a loan in our own names anyway, one for the car and the other for a loan that was taken out when we were married and these are always reported back to the credit file as up to date

The lender was RBS by the way and we have also a 25% deposit. We had applied for a Tracker Mortgage that had a very competitive interest rate.

Does anyone have any advice for us at all, we have had it with renting and have two children and really want them to have a home next to a decent school

Thanks

N

Mrs_Bumble

Was it an RBS adviser that you saw? or an Independent mortgage broker? If it was just the RBS then they tend to lend based on your credit score so not a good option for you as you already know that you have a low credit score.

If it was an RBS adviser in branch that you saw then find yourself and independent mortgage broker who will look for a lender that will look at lending not based on credit score alone. I think this is the best bet for you, because if you go around applying for different things yourself then they are going to carry out a credit score each time and thereby lower your score even further and lots of searches won't look great either.

Take your credit report to a good local independent broker so that they can look at the situation for you.

Conrad

RBS - suffered the largest loss in UK corporate history and have massive exposure to the increasing numbers of US homeowners in forclosure. Not a helpful lender really.

I wonder why the adviser recommends them, it makes no sense to me unless the adviser is a salesman type with no interest in economics and business.

Even with a low score there are a number of options with ok rates such as Beacon finance and even some small building societies worth a go.

Your adviser may be part of a network which tends to restrict them - check thier business card. A truly independant broker can use any lender and will know which small building societies to try.

Best of luck

Colz

I went to a broker whom told me that he was going to look at the whole of the market etc etc.
He has asked me to drop in some loan paperwork so that he can appeal against the decision with RBS. I think he was keen on the RBS route even before we met yesterday.
If he was to find an alternative mortgage are we then likely to be declined again because we have had a search done beforehand.
Is it even worth us looking at houses this weekend I guess!

Joe_Bloggs

I was never so strapped for cash when I bought my first place. My cushion of savings had gone my budgeting skills were non existent and I had no idea about council tax, water rates, survey fees, relocation fees, solicitors fees/ disbursements, stamp duty, house insurance, property chains, delays , complications and general frustration.

Never-In-Doubt has a comprehensive How do I get back on the Credit Ladder section in the Credit Card section of the MSE forum.

J_B.
Experian in the guise of lowermybills.co.uk claim to be able to match your credit profile to a credit card provider.

Mrs_Bumble

Good advice from Conrad, with your profile makes no sense to me either that would point you to RBS?

What difference is the loan paperwork going to make? How will he appeal the RBS decision from that? I thought that you had been declined because of a low credit score?

Conrad

Why trust your adviser when he didn't have the lattitude to recognise RBS are about the most difficult lender to use right now? Seems to me he does'nt have much of a clue.

Colz

Thanks for all the advice.
We did go to this particular company because on their website it says:

"We act on your behalf and are not tied to any lender, nor do we operate from a restricted panel, but arrange mortgages from the mortgage market as a whole."
The broker does charge a fee on completion but we thought fine as we want the best deal out there

Thinking about it we did not even get a business card.
Would the advice be then to ditch this particular advisor for someone else that truly as more of an understanding?

We were looking to buy a couple of years ago and I got an agreement in principle then when my credit file would have been in much more of a mess.

The broker said to me that "this has never happened before".

Mrs_Bumble

When you met with this adviser he should have issued you with his business card, the company Terms of Business and an Initial Disclosure Document these explain how the company carry out business, what basis they operate on.

Did he do that?

I would ask around for recommendations from friends or family find an independent broker that people will recommend. Take them all your info, including your credit report and make them aware of the RBS debacle.

The market 2 years ago was a very different place to it is now!

Well the broker tried to do an AIP on someone who told them/showed them up front that they had a low credit score! I still don't understand how the loan agreement was going to allow them to appeal the decision????????????

I would find someone else, your case from what you have said is placeable.

Colz

We signed a piece of paper that said that we gave him permission to contact us after the initial two year period had elapsed.
We walked away with nothing otherwise.
I have just spoken to an Estate Agent and they have a mortgage section that looks at the whole of the market so will maybe meet with them.
I think that I will wait to see what he comes back with in regards to this "appeal" though I think

Mrs_Bumble

Well you should have had everything that I described above.

What grounds did he say he would have to appeal? What difference does your loan paperwork make?