60% of Mortgage Applications Refused

abaxas

Really2 wrote: »

Sorry there has got to be a direct link between demand and failed applications. There is no exact figure I agree, but it would be wrong to say correlation between the two.

Mortgage application is most probably the best indicator of demand as it shows the willingness to buy.

Not many people apply for mortgages just for the sake of it.

Someone who asks for a good deal may get refused and moved to a different offer.

This happened all the time even during the boom, refused one, given a one with a higher rate etc.

The concept of a refused mortgage is not the same as being refused any mortgage.

Hence the two are about not linked in any way.

IveSeenTheLight

HAMISH_MCTAVISH wrote: »

Mortgage rationing continues.

Purely anecdotal I know, but I received confirmation that one of the DIP's (Decisions In Principle) has now been fully authorised.

I have another two approved DIP's which I'm awaiting the final approval.

They are all low LTV's so, maybe pointing that the lending is there, but only to lower risks.

abaxas

IveSeenTheLight wrote: »

Purely anecdotal I know, but I received confirmation that one of the DIP's (Decisions In Principle) has now been fully authorised.

I have another two approved DIP's which I'm awaiting the final approval.

They are all low LTV's so, maybe pointing that the lending is there, but only to lower risks.

That is the whole point of underwriting to make sure the company should statistically make money and that the mortgage payments will be made.

Really2

abaxas wrote: »

Someone who asks for a good deal may get refused and moved to a different offer.

This happened all the time even during the boom, refused one, given a one with a higher rate etc.

The concept of a refused mortgage is not the same as being refused any mortgage.

Hence the two are about not linked in any way.

You don't re-apply to switch mortgages?

Not saying they are linked is just odd, of cause mortgage applications are related to demand.

some may be related to second or 3rd applications a lot will be for potential purchases.

Someone who wanted my parents house can't get a mortgage so is their declined application a statistic of pent up demand in these figures.

Are you saying that non of these are people refused mortgages and they all got a mortgage in the end? If not they add to demand figures, so are linked.

geneer

IveSeenTheLight wrote: »

Purely anecdotal I know, but I received confirmation that one of the DIP's (Decisions In Principle) has now been fully authorised.

I have another two approved DIP's which I'm awaiting the final approval.

They are all low LTV's so, maybe pointing that the lending is there, but only to lower risks.

So lets get this straight.
You've managed to get DIPs on low LTV mortgages.
Not that interesting. Not really news.

In fact, if I was a cynical man, I'd guess you just really really wanted people to know you were expanding your Empire.
In principle that is.

ukcarper

MacMickster wrote: »

So on average, 50% of applicants are applying for mortgages of 4 times salary or higher, and doubtless not all have spotless credit records. It doesn't surprise me that in those circumstances 60% are being turned down.

How do you work that out.

HAMISH_MCTAVISH

Really2 wrote: »

Mortgage application is most probably the best indicator of demand as it shows the willingness to buy.

Not many people apply for mortgages just for the sake of it.

Yep.

I rather suspect most people that are currently being denied for a mortgage are perfectly decent people who would have been approved under the sensible, prudent and historically normal criteria we used to have.

Where a 5% or 10% deposit and a decent job and credit history was enough.....

My parents were offered a 95% mortgage in 1967, I was offered one in 1990, and 100% mortgages were available at least as far back as the early 1980's.

Today, just 0.9% of mortgages are issued at 10% deposit or less. That's not the way things used to be in the 2000's, the 1990's, the 1980's, the 1970's or the 1960's.

And anyone that attempts to tell you otherwise is either deliberately lying or barking mad.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Yep.

I rather suspect most people that are currently being denied for a mortgage are perfectly decent people who would have been approved under the sensible, prudent and historically normal criteria we used to have.

Obviously they don't get approved.

Sensible and prudent lending isn't JUST about deposit percentages as you wish to make out. Theres a lot more to it than that, including the wider economy, the outlook, requirements, cash reserves, profitability, risk etc etc etc.

You try to dumb the argument down into a simple deposit requirement percentage too often.

MacMickster

HAMISH_MCTAVISH wrote: »

Yep.

My parents were offered a 95% mortgage in 1967, I was offered one in 1990

I suspect that would be no more than 3 X salary, as opposed to the average applicant today wanting 4 X salary.

Maybe if people applied for sensible, prudent and historically normal sized loans in terms of income multiples then the lenders may view more of those applications favourably.

geneer

HAMISH_MCTAVISH wrote: »

My parents were offered a 95% mortgage in 1967, I was offered one in 1990,

Gosh. Two people were offered 95% mortgages.
Well that proves that then.
Clearly they were handing them out like church flyers.

HAMISH_MCTAVISH wrote: »

100% mortgages were available at least as far back as the early 1980's.

What, they were offering 100% mortgages in the years just before the last house price bubble came crashing down. Shocking!