Nationwide mortgage declined - advice!

jonathan_1983

I applied for a mortgage via my mortgage advisor and was declined. The reason given was credit score was too low.

I did a check last month using Equifax and my score was 514 and rated in the excellent category (albeit at the lower end of the excellent scale)

I have one bank account, one loan paid off with no missed payments and one current loan with no missed payments. My phone bill also appears on the report and again shows no missed payments since I took it out 3 years ago. Everything is green basically including the electoral roll etc.

The mortgage advisor explained that for a first time buyer, lenders are looking at 700+ ratings. I find this very frustrating as the loan amount is well within what they could lend me and feel I am getting punished for been brought up to budget well and not take endless out credit cards etc.

The mortgage advisor has appealed but I cannot see anything changing. What can I do in the short term if the appeal is unsuccessful? I do not want to rack up endless credit searches. From reading a few comments on here, the Nationwide appear to be fairly strict according to some people. My current loan however is with the Nationwide.

Can anyone suggest lenders who use Equifax and/or who are not as strict with their credit scoring? Or any further advice?

Many thanks.

BoGoF

For a start no lender will use the Equifax/Experian credit score as they don't see it. Lenders have their own scoring criteria.

The most important info, which you haven't supplied is,

1) Deposit you have
2) Your income
3) How much you are looking to borrow
4) Level of current outstanding debt

GMS

Did you apply for a high loan to value?

As has been said, ignore the scores from credit agencies. Until they start lending money they are irrelevant and a waste of money.

Did you fail at decision in principle or underwriting stage?

jonathan_1983

Thanks for the quick reply...extra details:

1) Deposit: £10,000
2) Earning: £25,000
3) Looking to borrow: £80,000
4) Outstanding debt: £6,000 (with Nationwide Personal Loan for car, currently paying £240 per month and have just over 2 years left)

For what difference it makes, I am a teacher and my income goes through thresholds, e.g. in September it goes up by £2,000 automatically and the next two years too after that until it stops.

When I was at the mortgage advisor's office, he showed me a list of lenders and each had whether they used Equifax or Experian, for example, on his sheet, it said Nationwide use Experian?

somethingcorporate

+1 to the above. You have a stupid advisor if they are referring to a credit score from a company that doesn't lend money.

Edit: do you bank with nationwide too?

BoGoF

They maybe search Experian but won't take their score from them. You will see plently people on this site with 999 scores (apparently perfect) being refused any sort of credit and are worth next to nothing.

By 'mortgage advisor' what do you mean?

jonathan_1983

He is a 'whole market' mortgage advisor or broker (whatever you want to call it).

I do not bank with Nationwide, I bank with Lloyds TSB. The only thing I have with Nationwide is that personal loan.

So where do I go from here? What is the likeihood of obtaining a mortgage without paying much higher interest rates?

Edit: Failed at underwriting stage.

GMS

Just tried the Nationwide affordability calculator.

Try it yourself:

http://www.nationwide-intermediary.co.uk/content/calculators/aff_calc.aspx

Gives a result of less than you wanted to borrow when loan included, assuming 0 children and date of birth of 01/01/1980.

Try it and see the results. May be a basic error by the broker in not checking affordability before submitting the application.

jonathan_1983

Thanks for that, I have just done it myself and it does come out lower than what I need. I watched the mortgage advisor put in all the correct details and the Nationwide did come up so I can't understand how this has happened. Mortgage brokers don't have any extra 'tools' do they in terms of obtaining mortgages?

vindicated

As a couple of others have stated...the credit reference agencies scores mean nothing, the adviser is a wally for even suggesting such a thing has an impact - the bank will take the information and score it using their own method of making a decision.

And everything else mentioned also holds true, amount of deposit etc.

Typically a first time buyer in todays market is expected to make around a 20%+ deposit, some lenders are more lenient but from what I've seen they normally say "20% deposit or 80% LTV maximum"

I dont know if you are currently a council or housing association tenant but if so there is a scheme called "Local Lend a Hand" which basically means your landlord (council or HA) will in effect provide a £20,000 backing, at a quick glance its Lloyds that offer this http://www.lloydstsb.com/mortgages/llah.asp and i do not know if other lenders have a similar option; i dont know the ins and outs but its worth a look, there is also another "Lend a Hand" for an individual to provide a guarantee http://www.lloydstsb.com/mortgages/lend_a_hand.asp

Hope this helps

GMS

If the details are entered into a sourcing system such as Trigold it will bring up Nationwide. The broker should not rely on this and instead do a check with the lender.

The best 'Tools' are knowledge and experience. There are contacts within lenders who can be asked to look at specifics but the broker should have known it was not going to fit with Nationwide as a 'standard' app and referred it for a decision.

There may be other lenders for you.

The credit score you have should be ignored. Check with Experian, Equifax and Call Credit that all data contained within is correct. £2 for a statutory report.

Go back to the broker and see if they can find an alternative. If you are not happy find another broker. Be wary of too many applications as this can cause score to lower.

Good luck