Mortgage applications rejected.

leewigan

There is nothing else. I've scrutinised both of our credit reports and emailed them onto my FA. I'm sat here waiting and feeling sick at the prospect of selling my house and having nowhwhere to go.

Hopefully it will all get sorted by my FA but I'm getting myself in a bit of a state about this.
We can comfortably manage the repayments and the house is perfect for us. If I don't get an answer this week and get the wheels in motion I'm basically going to have to rent for 12 months. That's a whole year of dead money.

holly_hobby

leewigan wrote: »

There is nothing else. I've scrutinised both of our credit reports and emailed them onto my FA. I'm sat here waiting and feeling sick at the prospect of selling my house and having nowhwhere to go.

If your wife's income is not needed (and the low score is not related to you) you may still be able to proceed by not inc her on the app.

Failing this, and unless you have exchanged contracts, your can pull out of your sale at any time without penalty - now its not ideal I know, but you do have that option. (any incurred legals will still need to be paid of course)

leewigan wrote: »

Hopefully it will all get sorted by my FA but I'm getting myself in a bit of a state about this.

We can comfortably manage the repayments and the house is perfect for us.

I understand your jitters and where you are coming from, but I am sure you can understand why lenders assess applicants on both their ability to pay & proven attitude to debt.

leewigan wrote: »

If I don't get an answer this week and get the wheels in motion I'm basically going to have to rent for 12 months. That's a whole year of dead money.

Notwithstanding you may choose to withdraw from your property sale (penalties if contracts exchanged). Renting is only considered "dead money" as you put it, if your new mge is C&I.

An alternative and more positive way to look at this, is in relation to any future purchase, in that you will be in a much stronger position to negotiate on a property (make sure you have an AIP to also demonstrate your position), or have your offer accepted over another - in some much that you will not be in property chain - so the vendor has security in knowing that (subject to survey) little can go wrong with your offer to purchase, and your capability to proceed through to completion.

Hopefully, your FA will get this sorted and the above will be academic - keep us informed as to your progress.

Hope this helps

Holly

leewigan

Thanks for all of your advice...

My wife's salary is needed as I fall short of the required amount on my own.

Can you just tell me what an AIP is??

Thanks

Lee

holly_hobby

( An AIP is an Agreement In Principle - which demonstrates to a potential vendor that you have been primarily assessed as suitable for a mortgage. (and is based on income & delcared status provided being correct i.e no un-disclosed adverse). Individuals can fall foul of an AIP when it goes to full application, where they have failed to disclose info or be completely accurate in info provided) ).

If you wife's income is reqd or your app - then hopefully your FA will get this through.

Failing this, IMHO if 2 lenders have already declined due to low credit score, I would think it pretty pointless to continue doing the rounds with the application to other credit scoring lenders, as you will find that they probably use the same markers - and also decline.

An option could be to apply to a local b society - where they assess the application on a more personal basis, and the manager has his own lending mandate (automony to make a lending decision).

Alternatively, if you elect to pull out of your current sale, it may be a consideration to improve your wifes score, to add her name to your current mortgage (transfer of equity as discussed in earlier post).

Then once she has some payment profile history, reapply for a mge in circa 6 mths time.

Or ... if your elect not to do this or complete sale and go into rented ...

Have a credit card in her name ... create a balance each month, and fully repay each month - thereby constructing a payment profile for lenders to base their credit score and financial analyis on.

Hope this helps

Holly

AMILLIONDOLLARS

You could alway pull out of your sale or postpone it until you get your required mortgage.

AMD

Thrugelmir

How much are you looking to borrow and what's your total annual income?

leewigan

Thrugelmir wrote: »

How much are you looking to borrow and what's your total annual income?

Not the issue really.

Mortgage would be £150k

Household income - £58k

leewigan

AMILLIONDOLLARS wrote: »

You could alway pull out of your sale or postpone it until you get your required mortgage.

AMD

That would have to be the answer if we didn't get the mortgage but obviously the main thing we need to know is "why haven't we got the mortgage" then we would be able to remedy the situation.

We do have an AIP now but it's at 90% without the builder paid deposit. As long as the builder agrees to take 5% off the price of the house it's looking good. That would also reduce our required deposit by £1,000

leewigan

OK. Having spoken to my existing lender a further opportunity has come up.
We can "port" the existing balance of our mortgage at it's existing rate (2.5% variable). We can then take up the existing balance on a fixed rate. They won't look at the new build because their minimum requirement is 80% LTV.
We've seen a house that we really like and in many ways prefer it to the new build. It's a 4 bed detatched with the garage converted to a study. The garden is bigger and not overlooked at the back. The sellers are happy to move to rented accomodation or family to speed up the sale
Looks like we're going for that instead.

leewigan

Just an update for those kind enough to help me.
Managed to sort a mortgage for the new build at 85% ltv at a fixed rate that I'm happy with.
Went back to builders who have thrown in carpets and help towards solicitors fees. I'm really excited now. Hope to complete in the middle of October.

Thanks for the help and advice