Refused Mortgage - Any advice appreciated.

fdm

This is my first post although I have been lurking for a while.
My husband and I applied for a mortgage through the coop and found out on Friday that they had turned us down due to outstanding debt at our address.
We have checked our credit reports and my husbands score is excellent and mine is good the only outstanding credit seems to be for my husbands car which is on lease hire scheme with volkswagon.
The morgage is for 179,000 with house price at 235,000. Our combined earnings are £60,000
The outstanding debt showing on experian for the lease hire is £8,000.
they have said that we should look at our credit reports and come back to them to reapply with further information.
My question is do you think that the coop will accept that the £8,000 is not a real debt in other words there is no obligation to pay this at the end of the agreement?
Any advice greatly appreciated.

herbiesjp

How much are you paying each month on the car?

Plenty of other lenders would not have a problem with your mortgage application, based on the above

Also, if you could, I would say to get to 75% LTV if possible in order to get better rates

maninthestreet

Maybe the Co-op deducted the £8,000 debt from your joint earnings, pushing the mortgage to over 3 times your joint income???

Mrs_Bumble

Did you declare the 'debt' on the application form? If you didn't the co-op underwriter would be concerned that you weren't disclosing.

My question is do you think that the coop will accept that the £8,000 is not a real debt in other words there is no obligation to pay this at the end of the agreement?

Did you disclose the monthly payments, lease hire contract payments on your outgoings? As it is a real debt as you are contracted to make the payments for the specified period of time and I suspect the £8K adds up to that requirement.

fdm

The £8000 is what we will pay if we wish to pay for the car outright but the scheme allows us to change to a new car after three years and remain paying the same amount ie. £300 per month. We are not sure how this was declared on the mortgage application as it was the coops financial advisor who filled out the application.
to herbie
Sorry I got the figures wrong our mortgage is for 25% ie £176250.
Hopefully it is just a case that it was not properly declared on the application.

herbiesjp

Well they will take £3600 from your income and then apply income multiples

You should still be fine with plenty lenders if Co-Op say no

Their loss

fdm

Thankyou for the prompt responses. Will a mortgage refusal not affect the application for another mortgage?
that is the thing that we are most worried about at the moment.

herbiesjp

Nope - just because you do not fit the criteria of one lender, does not mean you will not fit the criteria of a different one.

Try and find out the exact reason though, as this will help if you need to make another application.

fdm

any tips on how to get this info. as at the moment they are being very vague - we are assuming it is the car as nothing else is showing up.
We have a meeting with them again this week and again as I stated before any tips would be greatly appreciated.
Cheers

FraudBuster

Hopefully it is just a case that it was not properly declared on the application.

Did you sign the application forms?

Mrs_Bumble

fdm wrote: »

any tips on how to get this info. as at the moment they are being very vague - we are assuming it is the car as nothing else is showing up.
We have a meeting with them again this week and again as I stated before any tips would be greatly appreciated.
Cheers

Ask to speak to the underwriter directly as they won't pass any information to a third party even one of their own branch staff.

Did you actually detail this lease hire on the application form anywhere? Existing credit committment? Anywhere?