Help with mortgage application!!

emmagater

We have had a mortgage with Natwest for five years and applied for a new mortgage last week, including porting our existing rate etc.
I had a call from the advisor today informing me that our application had been declined on the basis of (in their words) 'a heavy dependency on an overdraft and poor misconduct of the Current account'

I have banked with them for 10 years and mortgaged with them for 5 years and aside from a few unarranged overdraft mistakes, have never paid them late, had arrears or given them any flack of any kind. My credit score, even after this application, is 900 and they said the application was fine apart from the stated problems.

Is it possible to appeal this decision and if so, what's the success rate for appeals? The 'overdraft dependency' they mention is a second account which is never used and I have simply just left and forgot it had an overdraft on it (£1,700) I was thinking it might help if I said I would clear the overdraft and close the account 'today', thus clearing that issue. The Current account misconduct is two minor payments totalling £25 which both came out on the last day of the month and, as they were a new Direct debit, were a day too early, hence why I missed them.

If I explain all the above, and they can verify what I say by looking at my accounts, is there any likelihood of them reversing their decision???

Getting pretty desperate so any advice would be GRATEFULLY appreciated

somethingcorporate

I very much doubt it although no harm in trying.

Your 900 score means literally nothing so take no heed of that, the company providing the score are not lending you money and the only score you are interested in is Natwest's. Unfortunately on their criteria you scored poorly given the reasons above (which indicate you are not as good as money as you think).

What they have said is correct, whilst you have reasons for your poor money management at the end of the day you have remained in a large overdraft, missed some payments and had some bounced DDs, none of which is reassuring for the lender. Correcting behaviours like the ones you listed above takes time, it is not as simple as paying back ODs and trying again.

payless

if your other account is constantly £1700 OD then that is dependency, unless you can show you had the means to repay - but didn't as the OD rate was lower than savings rate

emmagater

I can literally repay it tomorrow from an investment, I haven't done so earlier because to be honest, I just forgot about it.
My bounced DD's are the only ones that have happened for literally ages and, as I say, they were meant to be collected on 1st of the month and were instead collected on 29th. They can see my accounts going back for 10 years so they know I've not had bounced payments on a regular basis

payless

difficult as many lenders still have " find a reason not to lend" approach.

Forgot about a £1700 OD !!!! ... if I was an underswriter I don't think I would accept that- but if reason was that funds were tied up more productively elsewhere I might be more inclined....But added to the DD issues I would not be so happy ( an bank may be happy with a customer who goes unauthorised OD as it brings in fees , but for lending its not agood sign)

The fact you state they wheere bounced rather than them paying them by increasing OD would question if they are keen to lend ( I'm sure the DDs were small compared to the requested mortage)

Though I'm not an underwriter,

emmagater

That's what I find so bloody frustrating - the DD was for a total of £25 and the mortgage is for £205,000! They keep saying they'd be happy to review it in 3 months if my account conduct is good but I've been with them 10 years so they can see what I'm like. Plus, in order to apply for a mortgage, I have to get an offer on my house and an offer accepted on one we want, only for them to potentially say no again for some other reason.

Main problem is that we're now a bit stuck - if I leave Natwest, we have to pay an ERC of £5,000 which, on top of fees and 10% deposit, we haven't got. So it's Natwest or nothing really. Either that or look for a 95% mortgage which are like hen's teeth and pay through the nose interest-wise. So not really an option.

kingstreet

I think banks, NatWest in particular, have always been a bit obsessive over current account conduct when assessing a mortgage application. Building societies have never found the current account that big an issue, perhaps because they don't offer them on the whole?

One of the problems with the "eggs in one basket" approach is if you have a problem with one product it can often tip over to affect the others.

KingElvis

I know a little bit about Natwest and I can tell you that your "forgotten" OD will have led to an immediate decline even without those missed payments.

Natwest (and others) think that being consistantly in an OD means that you cannot manage your money and puts you into a high risk band.

Conrad

The FSA would take a dim view in the event of you subsequently getting into arrears and may deem Nat West irresponsible for lending to someone who had recently experienced some difficulty, which is why they want you to demonstrate 3 months satisfactory conduct. The fact you say you had 10 yrs good conduct does not override the issue.

Thrugelmir

payless wrote: »

if your other account is constantly £1700 OD then that is dependency, unless you can show you had the means to repay - but didn't as the OD rate was lower than savings rate

Somewhat unlikely that a savings account would offer a better rate than an overdraft.

payless

Thrugelmir wrote: »

Somewhat unlikely that a savings account would offer a better rate than an overdraft.

unlikely but it does happen - student, graduate and some "value added" accounts, or if savings were locked in and would have a penalty to withdraw