Post office mortgage declined after agreement in principle

wattosay

Hi there i need some help.

Me and my boyfriend have been looking for a mortgage now for a year. We have £30,000 as a deposit and are looking for £58,500. Unfortunately my boyfriend cannot be on the mortgage due to poor credit.

We eventually for a mortgage for 4.5 times my salary (£13,000) with the post office. The agreement in principle was made and we put an offer in on a house for £85,000. We are half way through the purchase with the solicitors when we recieved a letter. The letter said that we had been declined as i did not meet their criteria.

The letter came second class taking well over a week to arrive. Just wondering if anyone else had had this problem. Will ring tomorrow and report back if I am able to gather anymore information. Also would anyone be able to suggest somewhere i would be able to get a mortgage. Just in case.

Thanks

p.s. no major credit problems. 4 searches in the last 3 months and 11 in the last 12 - due to a poor mortgage adviser. No debt.

RuthnJasper

Hi. I can't offer advice specific to a mortgage - but I had home contents insurance with the Post Office until this year, when they suddenly cancelled it out of the blue because I "didn't meet their criteria".

I queried this and they said that it was because I lived "within five metres of a water-course". I DO live adjacent to a small stream, which has been "managed" (stream-lined...?:D) to provide water to a series of commercial watercress beds. There are puddles deeper than the river - AND it is down a bank from me, so there is no danger whatsoever of it flooding my home. I explained all this to the Post Office, but they wouldn't have it.:mad:

I got a good deal with Direct Line in the end.

Anyway - just offering this advice in case it is helpful. The Post Office didn't explain about the "water course" issue, on which they wouldn't budge, until I really harangued them.

Good luck to you and your boyfriend. x

poppysarah

If you want to share a house with your bf spend the next year or so helping him learn how to sort his credit rating out.

Then encourage him to save,

And then you can buy a house together and live happily ever after.

Alias_Omega

They probably had cold feet with the £13,000 x 4.5 calculation due to the sole income.

In there eyes, £13,000 a year income, would leave about £500 a month to live on after mortgage repayment. Throw in the birth of a child, the start of maternity leave & probably the mortgage wont be paid.

Your boyfriend / partner really needs to sort the credit out, as this is what is knocking you back.

goldbyron

Did they say if they would offer you a mortgage at all - if they would offer a lower mortgage - maybe you could knock this off the offer price? Are you employed in a stable industry - maybe this might be a reason?

sarah_elton

I assume your BF has an income. As others have said, if not, money is going to be very tight. (I bought my first place with a deposit of 4.2x my income - been there and done that - I struggled and couldn't save anything each month until I got a couple of decent pay rises from moving jobs and got the multiple down).

Assuming he does though and will be contributing but just not on the mortgage, you may need to go to a mortgage broker as even with a good deposit, 4.5x income is high.

FraudBuster

From the FSA:

The proposals mean that mortgage applicants’ incomes would have to be verified in all cases and their monthly expenses estimated to test affordability. Charges for borrowers in arrears will also be made clearer.



The changes would include:

• requiring all mortgage applicants to verify their income, to help prevent mortgage fraud and ensure consumers do not overstate their earnings;
• imposing affordability tests for all mortgage applications, and making lenders responsible for assessing a borrower’s ability to pay; and
• extra measures to protect vulnerable mortgage customers with an impaired credit history.

The proposals are based on detailed analysis of the mortgage market, including the causes of arrears and repossessions since 2005.

http://www.fsa.gov.uk/pages/consumerinformation/product_news/mortgages/responsible_lending/index.shtml

jozbo

as far as income multiples go, the PO is one of the stricter lenders in my experience. refused us on the basis of multiples whereas 4 or 5 others said it should be fine and would lend in excess of what we wanted.
as your partner's income isn't being taken into account here and would bump up the monthly income, assuming you could afford a mortgage 4.5x your salary;
i think natwest are more flexible on this so call round and see if you can get a similar deal.