Bank havent offered us enough? What now?

loulou79_2

We`ve been accepted by the bank in principle for a FTB mortgage, trouble is, its £30k less than we want. So what to do now? Is it worth applying elsewhere for more or going to see a broker? Im just wondering if its worth it really.

DannyboyMidlands

What are your salaries, debts, deposit, desired purchase price etc?

loulou79_2

Its a single application, just my OH, he earns 30k, has £80 per month credit commitments, no debts, excellent credit score, we have a 12k (could be more if needed, but not more than £16k) deposit and the purchase price is £115k. The bank have offered us £70k

GMS

Which bank? Is it HSBC?

loulou79_2

No its Lloyds TSB

GMS

You may find another lender willing to offer more.

A chat with a broker may help.

loulou79_2

Thank you, may try that

DVardysShadow

loulou79 wrote: »

Its a single application, just my OH, he earns 30k, has £80 per month credit commitments, no debts, excellent credit score, we have a 12k (could be more if needed, but not more than £16k) deposit and the purchase price is £115k. The bank have offered us £70k

Now this may appear shirty and irrelevant:-

• How can you have no debts but be paying a credit commitment of £80/month?
• Why do you have a deposit of certainly £12k and potentially £16k, while running credit costing £80/month?

Now the first point is picky, but it indicates an element of self delusion, which is present in the second point. Assuming 12% interest on your credit, you actually owe about £8k but have savings of 16k on which you are probably getting 3% interest. So you are paying 9% [£720/year] to claim that you have £16k in savings rather than £8k.

Turning now to your mortgage application, there are at least 2 ways the lender could have arrived at £70k

• the lender has deducted your outstanding debt from your deposit, arriving at a figure of £8k as your total equity and because you are financially well behaved, they have decided to give you a 90% LTV [loan to value] loan, which about the max you could expect, even though on a salary multiple of 3.5, you might get £105k.
• Alternatively, they could have said that you have savings of £12k, so at 85% LTV, the £12k is 15% of £82k property value, justifying a £70k loan

I suggest you discuss with them and find out how they calculate the maximum they will lend you and act accordingly to maximise your loan potential.

In the short term, it might or might not be a good idea to pay off that credit. But in the medium to long term it really does make sense to pay it off and go credit free.

loulou79_2

DVardysShadow wrote: »

Now this may appear shirty and irrelevant:-

• How can you have no debts but be paying a credit commitment of £80/month?
• Why do you have a deposit of certainly £12k and potentially £16k, while running credit costing £80/month?

Now the first point is picky, but it indicates an element of self delusion, which is present in the second point. Assuming 12% interest on your credit, you actually owe about £8k but have savings of 16k on which you are probably getting 3% interest. So you are paying 9% [£720/year] to claim that you have £16k in savings rather than £8k.

Turning now to your mortgage application, there are at least 2 ways the lender could have arrived at £70k

• the lender has deducted your outstanding debt from your deposit, arriving at a figure of £8k as your total equity and because you are financially well behaved, they have decided to give you a 90% LTV [loan to value] loan, which about the max you could expect, even though on a salary multiple of 3.5, you might get £105k.
• Alternatively, they could have said that you have savings of £12k, so at 85% LTV, the £12k is 15% of £82k property value, justifying a £70k loan

I suggest you discuss with them and find out how they calculate the maximum they will lend you and act accordingly to maximise your loan potential.

In the short term, it might or might not be a good idea to pay off that credit. But in the medium to long term it really does make sense to pay it off and go credit free.

The credit commitments are 2 mobile phone contracts costing £40 per month each, its not debt as such, and not something we can pay off at once either, otherwise we would!

The deposit we have is £12k (savings) but could up it to £16k as a gift off family.

kingstreet

Don't class phone contracts as credit. They aren't and lenders don't treat them as such either.

Is there something else in your make-up we don't know about? What about you? Are you treated as a dependent? Any children?

Even on a "C" pass, the lowest, Halifax's affordability calculator is quoting £150k for someone on £30k with no credit and no dependents for 90% over 25 years.

Something doesn't add up.

loulou79_2

kingstreet wrote: »

Don't class phone contracts as credit. They aren't and lenders don't treat them as such either.

Is there something else in your make-up we don't know about? What about you? Are you treated as a dependent? Any children?

Even on a "C" pass, the lowest, Halifax's affordability calculator is quoting £150k for someone on £30k with no credit and no dependents for 90% over 25 years.

Something doesn't add up.

Im baffled too tbh. Every calculator we have done online says it will give us what we need. I know we`ve only been to 1 lender, but I did imagine they would give us what we needed due to doing online calcs first. The fact Ive put down the phone contracts as credit hasnt helped us I know, but I wont do this in future now I know that!
Yes we do have 1 child together.No, Im not a dependant, Im his partner. Im not going on the application though, because my credit score is crap, to put it bluntly. Im not employed either yet, but hopefully will be in the next few months, so its pointless me applying as a joint applicant right now.