Mortage decline with no reason given question...

ugh1979

My deposit is 10%, which I know is low, but it's the best I can do and I need to move in the next month or so.

I'm looking to borrow £72k on a £80k property.

Does having my parents gaurentee it mean anything these days? At what point in an application could I even add that?

kingstreet

Your parents acting as guarantor may help with some lenders, although the term of the mortgage would have to end before they retire, unless they can evidence their income in retirement. If you fail the credit score, a guarantor will not help, so Halifax won't be an option.

A 90% mortgage is a fairly unusual beast in today's market and is reserved for those with a clean credit history.

Unfortunately, the one lender you might have approached for a quick solution won't accept an application because your property falls below its minimum.

As I advised earlier, obtaining your credit files from the other CRAs would be a good first step in establishing how to approach your situation. Only having an Equifax file is a disadvantage at this time.

You have an intermediary working for you. Cutting them out in search of a slightly better deal was a risky move IMHO. Hopefully they will be able to help you out of this predicament.

DVardysShadow

ugh1979 wrote: »

... However, I have a default 2 yeasr ago with First Direct on a loan. I'd been paying them back for years and then one day out of the blue they demended the full balance back all at once, which I couldn't do, so they passed the debt to a credit collection agency, who've i've been paying back since.

Is the default a rightful default?

• Were you meeting all of the contracted payments on time?
• Did they have the right to recall the loan?

If they did not have the right to recall it, then you have grounds to challenge the entry on your credit record. But I am guessing that as they recalled the loan, there was something else which prompted this? Of course I am speculating, but it seems to me that there may be more damage on your record than just the default.

ugh1979

DVardysShadow wrote: »

Is the default a rightful default?

• Were you meeting all of the contracted payments on time?
• Did they have the right to recall the loan?

If they did not have the right to recall it, then you have grounds to challenge the entry on your credit record. But I am guessing that as they recalled the loan, there was something else which prompted this? Of course I am speculating, but it seems to me that there may be more damage on your record than just the default.

I met every payment by DD for 7 years, then out of the blue they sent me a letter saying they required the balance. I was on a repayment plan at the time I may add. I can't remember the details of what rights they have to recall the loan and i've long since (stupidly) lost the paperwork.

I have added a note of correction to my credit report with the details of what happened and that I never once missed a payment.

DVardysShadow

What do you mean by a repayment plan? Do you mean a special plan for you because of a problem? Or do you mean you were repaying like everyone else?

There really is no point whatsoever in being obscure about things here. Tell it like it is, so you get the advice to deal with your situation, rather than something which will come unstuck because the advice does not address to the facts.

ugh1979

DVardysShadow wrote: »

What do you mean by a repayment plan? Do you mean a special plan for you because of a problem? Or do you mean you were repaying like everyone else?

There really is no point whatsoever in being obscure about things here. Tell it like it is, so you get the advice to deal with your situation, rather than something which will come unstuck because the advice does not address to the facts.

Sorry, I should have made it clearer. I was on a repayment plan due to being made redundant, so not being able to afford the full original repayments, so they moved me to a repayment plan of around half what I was originally paying. I have a full time job now and have done for the last couple of years.

kingstreet

ugh1979 wrote: »

I have added a note of correction to my credit report

Which means you'll struggle to get initial approval for anything and many automated systems default to a decline when they come across one. Will probably cause more problems than it solves.

DVardysShadow

ugh1979 wrote: »

Sorry, I should have made it clearer. I was on a repayment plan due to being made redundant, so not being able to afford the full original repayments, so they moved me to a repayment plan of around half what I was originally paying. I have a full time job now and have done for the last couple of years.

I would suggest that you are clearer with potential lenders too. Getting this information from you has the feel of getting blood from a stone.

Now put yourself in the position of being an underwriter. Your default is on file, but so are the consequences of the arrangement - in terms of reduced payments. So there is no hiding that something has happened - and it does not match the tale you tell on your application.

If I were underwriting you, I would be concerned that not only you get into a mess with a loan - I don't know why - but also you are obscure about it. So, it is not really the best start to a financial relationship and I would be fearing the worst - that you just cannot manage money.

Now, I can't speak for underwriters in general, but my opinion is that if you are open with them with a brief 1 line description of the situation - not an essay of self justification, they are not going to look on your case less favourably than they do now. Some of them might say that redundancy is the kind of risk that all borrowers may face, this is not a matter of financial incompetence at all. They might say that all of their issues with you could actually be resolved with Payment Protection Insurance

DVardysShadow

kingstreet wrote: »

Which means you'll struggle to get initial approval for anything and many automated systems default to a decline when they come across one. Will probably cause more problems than it solves.

An automated decline on a notice of correction is quite evil. I wonder if it is possibly a breach of Data Protection principles too.

kingstreet

I think it's a simple question of the cost of actually gaining the business being higher than the potential profit. In addition, there's also the question of the customer being a trouble maker and not really wanted. None of this is written down anywhere, of course. :mad: