Turned down for first mortgage :(

BMSrachael

Turned down for a 95% mortgage from Nottingham B.S today. Mortgage was for much less than the maximum I was quoted as being able to borrow. Repayments would have been approx 450 pm, which is easily affordable given I currently pay 640 in rent! I have two credit cards, one of which I've recently (as in last week) paid off completely and the second has about 1500 on it, and a sofa on credit. In any case, payments on those adds up to less than 100 a month. Apparently have been turned down for having a 400 overdraft on my current account. So frustrating.

Desperate to move as landlord is putting rent up to 665 pm, and I'd rather be paying my own mortgage than lining his pockets. Otherwise I would be more inclined to sit tight and save a bigger deposit/ improve credit rating etc. Can I apply for a Yorkshire bank 95% or will I be automatically rejected on the basis of having just been turned down by Nottingham? Does anyone know anything about their selection criteria?

GMS

Being turned down by one lender does not mean you will automatically be rejected by another. Your credit score may be lowered by an application recently however.

95% mortgage are very tight on scoring and criteria. Need to be squeaky clean and well within affordability. The fact that you are using an overdraft may mean an underwriter will think you cannot live within your means. I am not saying this is the case but it could be viewed like that.

BMSrachael

Thank you. I had heard that you couldn't apply for a mortgage for 3 months if you'd just been turned down for one, clearly this is a myth! I am worried about the effect of multiple searches on my credit score. I applied for a 0% on balance transfers credit card shortly before it became apparent I needed to move sooner rather than later as originally planned and I think that may be screwing me over in the credit score also.

callmechar

Does simply having an overdraft facility even though you don't use it mean you are.counted able to manage finances?

callmechar

Does simply having an overdraft facility even though you don't use it mean you are counted as not being able to manage finances? I have an overdraft but never use it

GMS

callmechar wrote: »

Does simply having an overdraft facility even though you don't use it mean you are counted as not being able to manage finances? I have an overdraft but never use it

No. Continuous use of an overdraft could be seen as not managing finances.

95% mortgages are difficult to obtain with lenders seemigly looking for reasons not to lend.

callmechar

Thanks gms. We are looking for 90% mortgage, are they really hard to obtain? Possibly post office

BMSrachael

GMS wrote: »

95% mortgages are difficult to obtain with lenders seemigly looking for reasons not to lend.

That's exactly what it feels like. They must realise that people who want 95% mortgages are not likely to be squeaky clean, otherwise they'd be able to an 80% or similar!

Sigh.

GMS

callmechar wrote: »

Thanks gms. We are looking for 90% mortgage, are they really hard to obtain? Possibly post office

As long as criteria is met and affordability proven then they are obtainable. Can't comment on Post Office as they are a non broker lender. I have done 90% deals recently. Clean credit file, no commitments and proven affordability. Offered quickly with little fuss.

Bank statements will most likely be requested and scrutinised for any undeclared credit and bounced items etc.

May be worth having a chat with a broker.

Obtain copies of your credit files from Experian, Equifax and Call Credit. Pay for the £2 statutory reports rather than opting for free trials which can be difficult to cancel.

Thrugelmir

BMSrachael wrote: »

That's exactly what it feels like. They must realise that people who want 95% mortgages are not likely to be squeaky clean, otherwise they'd be able to an 80% or similar!

Possible to have a high LTV on a low income multiple. So not directly correlated.

Worth bearing in mind that a mortgage needs to be cheaper than rent. As as a home owner you have the responsibilities that go with it. When renting its the landlords issue.

callmechar

GMS wrote: »

As long as criteria is met and affordability proven then they are obtainable. Can't comment on Post Office as they are a non broker lender. I have done 90% deals recently. Clean credit file, no commitments and proven affordability. Offered quickly with little fuss.

Bank statements will most likely be requested and scrutinised for any undeclared credit and bounced items etc.

May be worth having a chat with a broker.

Obtain copies of your credit files from Experian, Equifax and Call Credit. Pay for the £2 statutory reports rather than opting for free trials which can be difficult to cancel.

Thank u. Got credit reports from all 3 agencies. No debts. Fiances loans paid off 6 weeks ago. Old unused credit cards cancelled. Only debt student loan.