Rejected for mortgage

pbizz07

Hi All,

I have decided to write on here as I dont really know where else to try. Hopefully someone else is in my position and can help.

over the last few months I have been trying to get a mortgage. I have a deposit of about £75k and want to buy a house for approx £280k.

I had some problems last year with a development project I was involved with, never missed a mortgage payment but got into arrears on a personal overdraft. Went to debt collection etc etc.

I had tied all my cash in this venture and basically had a scenario where I had assets but no cash.

Development finished, all sold I now have cash and want to purchase a house. All debts cleared.

I have been rejected for a mortgage but cant understand why. I can proove my income, I have a deposit of sufficient size to pose no risk to a lender, I want to get on the ladder but cant.

Does anyone know if I have any other options or is it just a case of "computer says no" and ride it out for a year or two.

There must be loads of people like me. Who have had a hard time but now have cash and are willing to spend it. Cant understand why there aren't any mortgage companies dealing with individuals like myself.

Any help greatly appreciated.

GMS

There may be a lender for you.

Speak to a broker.

Who rejected you?

ruggedtoast

You need to sign up with some credit agencies like Equifax and Experian and find out what damage the previous arrears has done to your credit rating.

If the lender is running an Experian report on you at the point of application and you dont meet their lending threshold, then there is little you can do to convince them otherwise, other than working on repairing your credit rating.

pbizz07

I was rejected by natwest & lloyds.

I have accounts with both and fall into their "low risk" catogories for lending. The overdraft account was with First Direct.

I think both Natwest & Lloyds rate you themselves based on what goes in / out of your accounts with them, but then when they run the external check I get flagged up.

I tried an external broker, no help either. Dont know if the broker was any good though and/or what banks they dealt with.

Checked my credit file and it just show this overdraft, the amount of months I was late and it also says SATISFIED.

How long do you think the credit file will take to repair?

GMS

If no CCJ's, defaults, or missed mortgage payments you should have options.

What is your income?

pbizz07

Income approx £30k.

I had this issue with paying back this overdarft. Not sure if it went to default, but i have paid it off.

No ccj's, or missed mortgage payments.

I also have a buy to let mortgage still running that I have never missed a payment in.

Thrugelmir

pbizz07 wrote: »

Income approx £30k.

Very little chance of a mortgage of £205k on that salary level.

That's the issue you have.

pbizz07

sorry. I forgot to put on there that my wife also earns £30k!!!

£60k total

Conrad

The late payments on the overdraft will be a big issue with all lenders. The nonly lender you might want to approach is Melton but they wont lend more than 3.5 / 4 income and will want 3 or 6 months Bank stats to check conduct of your accounts.

The reason banks are rejecting you is because they need you to proove over a period of years that it was just hiccup. They are not in the business of being able to decide the in's and out's of your late payments, so ALL they can do is see how you go over a few years.

The fact you have a large deposit is not really relevant as lenders cannot lend merely on the basis they 'could always repo if they had to' as that is classed as irresponsible lending.

As I say someone like Melton might be worth a go.

pbizz07

conrad,

I phone melton. They couldnt actually help but do have a sister company that deals with people who are in the sort of position I am in. Slight credit issues etc. She said they do want alot of info and will need a substantial (25%+) deposit. Both of these requirements suit me fine.

She sounded pretty optimisitic so I will let you know how I get on.

Thanks for your help.

GMS

Melton Mowbray have a specialist arm called MBS Lending.

They will lend up to 60% so you will need a 40% deposit.

There could be better options for you.