Can't get a mortgage.

DVardysShadow

rising_from_the_ashes wrote: »

No - you get a credit card (or similar), use it and pay in full each month - this is how you build up your history to show you can handle having credit available to you and not abusing it .... not by having debt as this shows you can't pay things off!

Pay everything off, use your credit card for something like groceries or fuel each month and clear it each month, and save a bit more for a deposit.

I have to agree. Having as many as 10 accounts on the go is excessive. Keeping debt on them is sending the wrong message. For example, 10 accounts with £8000 credit available on each but 'only' £5000 debt between them is telling a mortgage lender that when you have a property you will have a further £75000 you could go mad with and get yourselves in a serious mess.

It looks like you have set off the early warning alarms for delinquent borrowers.

Robbo17

DVardysShadow wrote: »

I have to agree. Having as many as 10 accounts on the go is excessive. Keeping debt on them is sending the wrong message. For example, 10 accounts with £8000 credit available on each but 'only' £5000 debt between them is telling a mortgage lender that when you have a property you will have a further £75000 you could go mad with and get yourselves in a serious mess.

It looks like you have set off the early warning alarms for delinquent borrowers.

I appreciate what your saying but we are only really talking £1600 of debt in total. I'll make sure these are paid ASAP if that is the problem but I very much doubt that they only give mortgages to people with no debt at all. Judging by some of the threads iv read on here I really can't see why I'm having a problem obtaining one.

opinions4u

Robbo17 wrote: »

There is not much risk for them because if I do default which is very unlikey then they get to reposses my house.

I appreciate that you have never underwritten a mortgage. Or ordered the repossession of a property. Or had to maintain a property in possession of a lender. Or had to sell a property on a new build estate that has been repossessed, for half the value of the debt secured against it.

But lending to a first time buyer carries a significant degree of risk.

Lending against a new build property carries a higher degree of risk that lending in an established residential area.

Lending to a first time buyer who can't afford to buy the whole property, needing to rely on a builder's incentive carries additional risk.

Lending to a first time buyer with the minimum possible deposit overlays a further element of risk.

Loans to your segment of the market are about as crappy as it gets.

They should not offer people these deals if there is to much 'risk' for them.

No. They should offer them. But they should lend cautiously. As they clearly are doing.

Not being funny, but you're sense of "I'm a good risk I should be entitled to this mortgage" is a pretty poor appoach to one of the biggest financial commitments you will ever take on.

Shake the catalogues. Clear the credit cards fully. Save a proper deposit. Buy a proper house that you can afford the full price of.

DVardysShadow

Robbo17 wrote: »

I appreciate what your saying but we are only really talking £1600 of debt in total. I'll make sure these are paid ASAP if that is the problem but I very much doubt that they only give mortgages to people with no debt at all. Judging by some of the threads iv read on here I really can't see why I'm having a problem obtaining one.

I think actually, you have missed the point. The fact that your actual debt is so small makes things worse. Your problem is not so much £1600 debt - although this is much better paid off in full each month, the actual amount is trivial. The problem is that you have so many accounts with too much credit available to you - which could cause a serious problem if you used it.

charleyroo

Robbo17 wrote: »

I appreciate what your saying but we are only really talking £1600 of debt in total. I'll make sure these are paid ASAP if that is the problem but I very much doubt that they only give mortgages to people with no debt at all. Judging by some of the threads iv read on here I really can't see why I'm having a problem obtaining one.

Easy to see your trail of thought but to the lender, in black and white, for some unbeknown reason you have £1600 of debt that you can't seem to pay off very quickly.

The most sensible (and took the longest to get my head around!) theory is that the easiest way to get credit is to prove you don't need it!

BMSrachael

Robbo17 wrote: »

So what your saying is you cant get a mortgage with little debt?? I'm asking why you think iv been declined? other threads people owe thousands and get a mortgage. I owe next to nothing and can pay everything today but will still get declined. Iv worked hard for my money and what deposit I have which is all they say they require so what's the problem?????

I can sort of see where you're coming from here. Like you, I know people with thousands on credit cards and other debts, and I always thought mine were pretty modest in comparison- one credit card and a small overdraft. We've also just been turned down for a mortgage, due to low credit scores, even though the repayments are well within our affordability (especially given the ludicrous amount we currently have to spend on renting, it'd be almost £200 a month less to pay off our own mortgage, on a BIGGER property). I also didn't realise that even a small amount of debt pretty much writes you off for a mortgage. Just the current climate I suppose. Good luck anyway.

Robbo17

BMSrachael wrote: »

I can sort of see where you're coming from here. Like you, I know people with thousands on credit cards and other debts, and I always thought mine were pretty modest in comparison- one credit card and a small overdraft. We've also just been turned down for a mortgage, due to low credit scores, even though the repayments are well within our affordability (especially given the ludicrous amount we currently have to spend on renting, it'd be almost £200 a month less to pay off our own mortgage, on a BIGGER property). I also didn't realise that even a small amount of debt pretty much writes you off for a mortgage. Just the current climate I suppose. Good luck anyway.

Finally someone who understands where im coming from! These people are pretty much saying if you have debt you can't get a mortgage and for the people saying I can't afford to pay my debt in full I JUST HAVE TODAY. So now I have nothing outstanding lets see if it helps. I very much doubt it.

opinions4u

Robbo17 wrote: »

Finally someone who understands where im coming from!

It doesn't matter if others sympathise / empathise / understand though does it? They're not lending you the money.

These people are pretty much saying if you have debt you can't get a mortgage

No they're not. They're suggesting that having multiple debts is one of many possible reasons why you're not being offered a mortgage.

and for the people saying I can't afford to pay my debt in full I JUST HAVE TODAY.

I may have missed it. Where have people said that?

So now I have nothing outstanding lets see if it helps. I very much doubt it.

Keep the receipts. You may need them as proof as credit files don't update quickly.

But remember there are numerous other factors involved with credit scoring. Your debts are just part of the rather complex equation.

Thrugelmir

Robbo17 wrote: »

So now I have nothing outstanding lets see if it helps. I very much doubt it.

Both the Halifax and Nationwide offer saving schemes to FTB's. May be worth investigating. As evidence of the ability to save on a regular basis is a major plus.

Odette

OP you seem to only listen to people who are giving you advice that you want to hear. My and my OH are 26 and 30, we have no debt, no commitments or loans, and have a salary 1/3 more than yours. HOWEVER were moving in with my parents in order to save more deposit because even we cannot get a mortgage with 5%.
Sorry mate, thats just how it is at the mo. If you have a roof over your head, you do not NEED a house, you WANT one.