Santander mortgage application problem

CazuaLL

Hello all, I'm am new to these forums and I have signed up for some advice on a situation I have.!

I went to Santander on Saturday 21st of August to discuss a mortgage. All talks went fine with the advisor about affordability and everything was looking smooth to lend £28,495 ,including the booking fee with a £7000 deposit, the property is a part buy/part rent.

I then went into Santander on the 28th of August (Yesterday) and all talks about affordability went fine with the advisor, I paid my loan off for £2000 which had a £138 repayment each month, on the 19th august so I have nothing tieing down my name for a credit search.

She made my application and after taking loads of details after an hour or so she searched me details for a credit check, it came back refuses due to affordabilyy, to be honest my heart sank as we have a child on the way in october and this place would be the start of a new chapter.

The kind advisor I had has send off proof to underwriting with proof my loan is paid off as she said experian are usually on a delay to what they can see on a credit file, like they work 28 days behind the present date and she said she will speak to them and call me Wednesday the 31st and let me know if it's good news or bad news.

I'm just wondering if my loan is still showing on my credit search and that I'm still paying out £138 a month in which case it could be why it's showing refused under affordability :S The advisor at Santander who we had said it's a bit strange :S

Anyone have any ideas of moves I can make or any help would be grateful?

Thanks
Liam

pinkqueen

Hi, I'm not really sure I understand your question, however I do think that having an extra £138 a month will not make a very big difference in terms of what Santander class as 'affordability'? Is this the only reason they gave for declining?

Perhaps you can clarify your question a bit more, or post some more info (ie deposit size, salary, size of mortgage etc)?

CazuaLL

The advisor thinks that my loan is still showing this is why she is contacting the underwriting to get a decision for me.

Property value: £140000
Mortgage: £28,495
Deposit: £7000
Salary: £21000

Scully38

CazuaLL wrote: »

The advisor thinks that my loan is still showing this is why she is contacting the underwriting to get a decision for me.

Property value: £140000
Mortgage: £28,495
Deposit: £7000
Salary: £21000

This seems a bit strange to me, usually if you've had a loan for a while and have been paying it off for some time, on time and the correct monthly balance, it usually improves your credit ratings. And the loan to property value is very small. If you're only applying for a mortgage of 28,495 on a property value of £140k then you must have more of a deposit that £7000, either that or your bank statement must show a considerably healthy balance. Is this a repo property or family property?

Is it just me that the mortgage to property/deposit ratio seems a bit out of kilt a? Your salary certainly seems fine given your mortgage request, so it would seem unusual if the loan is the 'obstacle' for you to gain a mortgage as loans and credit cards help get you a good credit rating, it's only if you've had problems paying bills/loans/mortgages and you are/have been bankrupt before that it would cause problems. So i'm a bit confused as to why there would be a problem.

CazuaLL

Exactly my problem, it's very strange and even the advisor has said this.

The property is 140000, and it's a 20% deposit on a 35000 share, the property is part buy of 25% and part rent of 75%

silvercar

So you are borrowing £28,485 on a £35,000 share ie over 80%. That is what is the problem.

Scully38

CazuaLL wrote: »

Exactly my problem, it's very strange and even the advisor has said this.

The property is 140000, and it's a 20% deposit on a 35000 share, the property is part buy of 25% and part rent of 75%

Ah right, I get you, that's where the problem is as the other poster said. Who owns the remaining share? Usually a property (from what i've seen) are either buy to let or there's a 50% share, i've never heard of this scenario before, and it may be that your mortgage provider is concerned if you do not have the majority share of the property or at least equal share. How did this come about that you are only requesting a 35% share of a property valued at 140k? And who is responsible for the 75% rent? If that's you? I would assume that the mortgage provider in question would request a deposit of 20% based on the whole property not on a 35k share.

Am I missing something?

CazuaLL

I'm borrowing £28,000 and paying £7000 deposit, then Santander add £495 on for the booking fee

CazuaLL

The financial advisor at Santander is aware of this and they have a deal to offer a shared ownership mortgage with the people who own the remaining 75% of the flat. The company who own the remaining 75% is affinity sutton. They even offer a 5% deposit on a 25% share of the property but we chose to go with a 20% deposit of £7000 to leave a £28,000 mortgage

Scully38

I have never heard of acquiring a less than 50% share in a property when getting a mortgage. Although it's santandar offering the mortgage deal, I don't understand how they could do this as you will have no say (as you will not be the majority owner of the property). So if anything happens they could technically sell this 75% share with anyone, i'd look into the problems associated with this. I've never heard of only acquiring a small percentage of a property even on s shared basis, certainly one's where it's less than 50% as you would not hold the majority, you would have no say in the remaining 75% turninging into a chippie/shop/business etc... Is the property one flat or multiple flats/house with multiple occupants?

CazuaLL

Yes I will pay rent on the remaining 75% share of £241 a month and a £86 monthly service charge, and this is a specific deal between Santander and Affinity Sutton, I will own 25% share of £35000 and pay a £7000 deposit. And then the £495 booking fee is added to the £28000 I'm borrowing.

The deal between Santander and Affinity Sutton allows the buyer (myself) to chose how much deposit I pay, which is 5% or more.

The mortgage we applied for was a 4 year fixes rate, borrowing £28495, over £35 years. Which is repayments of £150 a month.