Mortgage application declined - can we find out why?

kenwen

Had some bad news last week, our mortgage application got declined.

The bank were unable (unwilling?) to expand on detailed reasons why but our advisor did say we should try again immediately if we could increase deposit amount

I'm confused as we were told we didn't meet their credit score requirements. So was it down to deposit or credit score?

We are first time buyers, 25% deposit on a 177k purchase price with income of 32,500

Wanted to find out how much information we should be able to get and whether upping deposit to 30% really would help

Cheers,
Ken

GMS

kenwen wrote: »

Had some bad news last week, our mortgage application got declined.

The bank were unable (unwilling?) to expand on detailed reasons why but our advisor did say we should try again immediately if we could increase deposit amount

I'm confused as we were told we didn't meet their credit score requirements. So was it down to deposit or credit score?

We are first time buyers, 25% deposit on a 177k purchase price with income of 32,500

Wanted to find out how much information we should be able to get and whether upping deposit to 30% really would help

Cheers,
Ken

Obtain copies of your credit reports from Experian and Equifax. You can get statutory reports online for £2 each.

Check all details are correct.

Your adviser should know why you were declined. If he is suggesting upping the deposit you may have failed affordability. Impossible to say with limited information.

Income is at around 4 times though. Do you have any credit cards/loans etc?

kenwen

Hiya,

We checked our credit file before and after, think we scored about 877 which came back as high average, about 3 points off good.

Will pester mortgage advisor to confirm if its affordability. From what we've been hearing that sounds, and hopefully is, probable as I can raise more for deposit

Have at 3k in cards and loans, all accounted for in affordability checks

Thanks,
Ken

GMS

kenwen wrote: »

Hiya,

We checked our credit file before and after, think we scored about 877 which came back as high average, about 3 points off good.

Will pester mortgage advisor to confirm if its affordability. From what we've been hearing that sounds, and hopefully is, probable as I can raise more for deposit

Have at 3k in cards and loans, all accounted for in affordability checks

Thanks,
Ken

Dont worry about the score. Only relevant if the credit agency were the lender.

Go on to the lenders website and put your info into the affordability calculator.

I would hope your adviser did this first before applying though.

May shed some light on it and should give you a maximum borrowing figure

xcapade

GMS is right in what he has just said. Can I ask if you got the rejection when applying for an "Agreement in Principle" (AIP) with the lender? or if your were rejected after submitting a completed application.

As GMS stated if it was a matter of affordability, the advisor should have input this information into the affordability calculator before applying for mortgage.

What lender was it ?

kenwen

xcapade wrote: »

GMS is right in what he has just said. Can I ask if you got the rejection when applying for an "Agreement in Principle" (AIP) with the lender? or if your were rejected after submitting a completed application.

As GMS stated if it was a matter of affordability, the advisor should have input this information into the affordability calculator before applying for mortgage.

What lender was it ?

It was rejected after the completed application. We had a pre approved application (which i haven't a clue what it is), And we had gone through affordability with the advisor which worked out fine, in fact, it cuts our monthly outgoings in half to buy over rent. Advisor went through our credit report and said all was fine, even with two late payments (all below fifty quid)

We are applying through the Woolwich

Cheers,
Ken

GMS

kenwen wrote: »

It was rejected after the completed application. We had a pre approved application (which i haven't a clue what it is), And we had gone through affordability with the advisor which worked out fine, in fact, it cuts our monthly outgoings in half to buy over rent. Advisor went through our credit report and said all was fine, even with two late payments (all below fifty quid)

We are applying through the Woolwich

Cheers,
Ken

Could well be the late payments. Pre approved application sounds like a Decision in Principle which is as good as the information given. Missed payments may have been picked up later.

Current rental payments being reduced would not help an affordabilitycalculation for a lender. As much as it makes sense, the lender has no iterest in what you pay out before they would grant a mortgage, only what is being paid out when they have the security.

Woolwich have minimum surplus from income. Make sure it fits before application.

What were the missed payments on? Were they consecutive? Have they been brought up to date?

kenwen

GMS wrote: »

Could well be the late payments. Pre approved application sounds like a Decision in Principle which is as good as the information given. Missed payments may have been picked up later.

Current rental payments being reduced would not help an affordabilitycalculation for a lender. As much as it makes sense, the lender has no iterest in what you pay out before they would grant a mortgage, only what is being paid out when they have the security.

Woolwich have minimum surplus from income. Make sure it fits before application.

What were the missed payments on? Were they consecutive? Have they been brought up to date?

The late payments were about forty quid on some mail order stuff and are all up to date and were not consecutive.

Will be really frustrating if it is, although understandable, especially with the tightening up on lending - however, we had let our mortgage advisor know and she was happy to put application through, we've banked with Barclays for years and they did the application in house.

Ah well, will see what happens next week. Fingers crossed it is down to deposit amount as I can raise more for that.

Cheers,
Ken