mortgage refusal FTB with 25% deposit

dawn_b

Hi,

Here's my situation:
1st time buyer
25% deposit with money to spare
combined income of £71K pa not inc. overtime and bonuses
no adverse credit history on either of us
for me: 1 credit card paid off in full each month, 1 contract mobile phone for about 10 years with same company
Credit score 938 out of 999 (experian)
Nothing bad on my credit report

Yet we've been refused a mortgage (something has led us to believe it is due to not enough credit history on my part). What is going on? What does a non-homeowner have to do to get a mortgage these days? I'd take a wild guess that the people with the 25% deposits in cash are not the same people with the big credit histories through store cards, unsecured loans etc.

Rant over, but seriously is there anything I can do here?

dawn_b

some extra info: the amount we want to borrow is just under 2.5X combined salaries, so its not multiples either.

opinions4u

Okay, on the face of it things look good.

I'd pay little attention to Experian scores (although what feeds the 938 score)?

Which lender has decline you? Some, like HSBC, cherry pick. Others are a little more accommodating.

Are you registered to vote?

Do you both hold a well conducted credit card?

What's your address history in the last 3 years (many or few)?

How long in employment?

Type of employment?

Is it a "normal" purchase or shared ownership?

Is the stronger applicant named first?

Loads of things can affect it. I'd appeal things if I were you and if unsuccessful go and find yourself a reputable local broker.

herbiesjp

So looking at a mortgage of around £177k and a property around £240k - is that correct?

Which lender has refused?

There are plenty of other lenders that could agree this - especially a lot of the smaller building societies, if the high street lenders say no.

I'd get a copy of you credit file and discuss your options with a whole of market adviser.

Conrad

Some smaller lenders can take a human view and not pay undue attention to a credit score. From what you say it seems a mortgage will be more than possible.

azazle

Who were you looking to borrow with and is the income guaranteed?
My sister had a couple of knock backs because about a third of her wage was commission and bonuses etc but eventually she found a lender willing to accommodate this (nationwide).

livalicious

How annoying for u both! Not qualified to give you any advice, except maybe try Nottingham BS? (and no I dont work for them before anyone asks )

We applied for our mortgage through them with a 15% deposit, our income is much less than yours, and we probably borrowing a bit more than you (if herbiesjp's figures are correct). I have no credit history, and partner wasnt on the electoral roll either. Application + valuation was done in about 3 weeks, and mortgage offer approved.

Good luck, hope it works out better for you second time around!

Batchy

Interesting. I am in a very similar position to you, so will be following this thread with great interest, as how you get on, will highlight any problems I may have.

I would say the main thing to concern yourself with is what your affordability is like.

Multiples are ok, but if youve gone with a lender that concentrates on affordability more than income multiples, then perhaps you have other credit commitments etc?

If you have even a small outstanding loan say 200 per month for another 18 months it will be taken into account on monthly outgoings?
Student loans?
Do you have car commitments? Lease's?
How did you come by your deposit, can you show strong savings, or have you just suddenly inherited a lot of money. Again saving shows fundamentaly sound bet.
How long have you been in employment, also, have you checked your partners, as it will be based on worse common denominator ie, lowest credit score of both of you.
How many kids do you have. ie dependants?
How much fuel do you spend, ie 500 per month just to get to work and back?
Do you have to pay CSA to another child for example. (sorry for asking, just checking)
Also, just wondering how the comapny you work for is getting on, im sure banks credit score employers nowadays just to see potential job security etc.
Along with address's and electoral registration.
You say no adverse, I assume there have also been no late payments?

Good luck, please keep us informed.

chin up, there will be someone out there for you, its just finding the appropriate match up.

bluebot

You mentioned above that having many addresses in the last 3 years will harm your mortgage application, and I have read this elsewhere as well.

I will be applying for a mortgage at some point in the next year, but due to work commitments I have had to change address several times in the past couple of years. Apart from this, I have a good credit rating, so I was just wondering if there is anything I can do about this now to help myself when I need a mortgage? It seems very unfair to penalise you for being mobile for career reasons!

Sorry for hijacking the threat slightly but I just see myself as being potentially in a similar situation as Dawn in a few months time.

sidebar

I applied to Nationwide for a mortgage with a 15% deposit, no adverse credit/CCJ's etc, on electoral roll, but got turned down apparently due to lack of credit history (never borrowed before). Applied for a mortgage with my bank (Lloyds/C&G) and got accepted no problem - they have their own credit score based on my history with them.

Based on that experience I'd say if you're stuck, try your bank.

dawn_b

thanks for your replies. here's further info:

the lender is Accord.

not shared ownership, just a couple going in to buy a house together. fairly normal.
electoral roll, yes
permanent employment, yes and the combined salaries are based on our basic pay before bonuses/overtime
well conducted credit card, yes both of us
been in 2 different rented places since 2007
I recently started a new job however the lender's terms on their website state that length of employment is not one of their factors. We've both been in continuous employment for many years, since 2005 at the worst.
no dependents, no student loans, no car loans, companies doing well (would they be able to find out anyway?), saved up quite a bit to be able to build up the deposit that I have.

We submitted all the details about living costs and credit/debt status and got the mortgage approved in principle. It is only when it went to full application that we hit problems.