Mortgage offer declined

Nikky320

Hi all,

I have just been informed by my mortgage broker that my mortgage offer was declined by the building society I applied to.

I am currently trying to buy a shared ownership property and the mortgage is for roughly £46000.

I stupidly didn't check my credit report before I applied as I completely forgot about 3 late payments I had two months ago wen I was on holiday.

All these payments were paid in full and within 30 days and the accounts are now clear. However, as my file has not yet been updated for the month of may and my late payment was in April although it is paid it is still showing as my account is in arrears although it is now in credit.

My questions:

1. Is it likely I can reapply in the next month when my account is not showing as an arrear and be accepted

2. As the three miss payments are so fresh is it unlikely I will be offered anything for awhile ? ( I have a 1 2 and a 1)

3. I am only putting down a 5% deposit and can only stretch to 10%, would this make a difference?

Sorry it's so long and thanks for any advice in advance

opinions4u

Missed payments. Small deposit. Shared ownership. This is a high risk combination and I'm not surprised you've been declined.

I think you're going to struggle to get a mortgage for a few months at least. Pay all your bills on time, save more deposit and take it from there.

You can't afford to ignore your commitments like this in future. Going on holiday is a poor excuse.

Sorry.

paint

I recently applied for a mortgage and had two recent missed payments from Jan & Feb (1,2 on my credit file). I was aware of this and flagged it to my broker, who flagged it in advance (with the explanation) to the lender and 'got the nod' from the underwriter to proceed with the application. It took 7 weeks, but the mortgage was approved. So it's not impossible with recent missed payments, but having said that, I had a 40% deposit.

I have to say, though, that it gave me a scare and reinforced the fact that poor personal administration can have a massive impact on our lives these days. I now have everything on direct debit so I don't make the same mistake again.

Conrad

Nikky, you may have to wait a while, perhaps a year or so as 3 months late payments will be considered high risk. You say it was because you were on holliday, but your holiday was what, a couple of weeks, so it doesn't really wash.

Shared ownership is seen as very high risk as the arrears experience is disproportionaly high, so another risk factor.

The point is this. If you were now granted a mortgage and then missed payments in 12 m time, you could very easily be one of those on the boards asking 'can I claim for misselling - the lender knew I was struggling to meet my past credit commitments, yet they still went ahead and loaned me a much larger debt than I was used to'.

Furthermore the regulator may take your side if your get into arrears as they to would have serious questions as to why someone struggling with commitments, was granted a £46000 mortgage.

Nikky320

Hi all thanks for the useful replies.

I am more than able to afford the property based on my income so finances are not the problem. I was late on the payments due to a very stupid oversight ( would never do this again) but it is clear that I could afford the payments. All of my Credit accouts are now settled and the late payments amounts to just over £100

I have spoken to my mortgage broker and he believes that it is very likely I will be able to get a mortgage with a specific high St bank who I more lenient with adverse credit but will need to put p a 10% deposit which I can do, also the rate is 0.8% higher

He also said that this bank would do a soft search so would not leave a footprint on my credit report so if I am declined again it will not cause me future problems

I will wait till the arrear is cleared on my account (will be this month) and hopefully I will be accepted!

I am definitely going to set direct debits up for everything and be much more efficient with my finances

If anyone has anymore experiences I would appreciate hearing them?

Thanks

Nicola

Conrad

Nikky320 wrote: »

it is clear that I could afford the payments.

From an underwriters view it is not just whether the figures stack up in terms of affordability, but more imprtantly the applicants propensity to be organised and not have mishaps.

You seem perfectly capable to me, but from a strict cold underwriting view you have demonstrated a period of missing commitments.

I hope you manage to find a lender, but at the same time just wanted you to have an insight as to how a lender views the world - it's all based on demonstrated behaviour and not on what ifs or what should have been. ALL people missing payments tend to say it was a silly oversight, lenders are used to being told this. The underwriter will be thinking 'well how come I don't have silly oversights in my own life then'.

flizz2

Hi Nikky, just out of interest, which was the high street bank. I am also looking for a 90% ltv mortgage where lender may be lenient.

Nikky320

Hi flizz hope you got my msg I'm new to the site so was unsure if I could post the info here so sent you a pm

w15arh

hi nikky im also interested in who this high street bank is could u pm me the details

thanks

mancini601

And me please Nikky.

Thanks.