First time buyer, 90% LTV 2yr fixed with Natwest - likely to be rejected?

vaselinequeen

Hi all,

So I have put in an offer of £66,500 on a flat in Scotland, which has been accepted. The home report value was £65,000 - I have a deposit of £6,500 and will pay the remaining £1,500 myself, so looking to borrow £58,500.

I had intended to use my bank, Santander, for my mortgage, however they only told me half way through the application process that they only offer 90% LTV if the flat is brand new - the flat is 30 years old.

Was going to go with HSBC but had heard horror stories. Found a decent deal with Natwest, no valuation or arrangement fee and I got my AiP on Wednesday.

I now have to send off three months of bank statements. The problem is this; I overspent at Christmas and for one day in February, went into my unauthorised overdraft (-£450) as a transfer from my savings account was delayed. I wasn't charged and my balance the next day was brought up; but I was still in my overdraft at the end of the month.

I'm concerned that if they only look at my statements in this period, it looks like I overspend my money and can live in my overdraft, which I do not. This month I received my bonus so it's all cleared off and I am in the black, so certainly the month of March will reflect my normal spending.

I earn £20,000, have a stable work and address history, am on the voter's roll and don't have any credit card debt or loans, excluding Student Loan deducted from my salary. I also always pay my bills and rent (which is just less than my mortgage would be) and this is the first instance this year of my using the overdraft.

I can send more statements to them but not sure if this would help; I received a large lump sum from my dad when he retired and enjoyed spending it! So again it may look like I am overspending, when actually I was still left with a balance at the end of each month, and I saved.

Can anyone advise if based on affordability criteria I am likely to be refused? They have said the reason I need to send my statements is to prove my salary, but of course it is also for affordability checks.

Thanks in advance.

PS - Not sure if this makes any difference - I live in Scotland and the property is located there.

MagicCats

One of the resident brokers should be able to help on the affordability side soon

One question though: With the market still slow in Scotland, and a HR value of £65k, why did you offer £66.5??

Simon_gloster

Abbey will only do 90% LTV on new builds? Is this right?

I would have thought 90% on anything except new builds. If its true thats very interesting.

vaselinequeen

I know Simon, bit odd I thought too; they said they could only go to 85% for first time buyers unless it was new build!

MagicCats - good question. Basically I could afford it and have been looking for a while, and it had everything I wanted and more. I plan to stay in it for some time so over the course, the £1500 won't make a massive difference to me. It was a tough call, but I believe home reports are more of an art than a science, and my purchase of a house is for it as a home primarily, and an investment secondary. Just my opinion!

vaselinequeen

Also - I'm looking in the Glasgow area and let me tell you - within the £60-80k bracket, the market really is anything but slow here! Any lower or any higher it's slow, but it seems steady in that price range at the moment.

Simon_gloster

To answer the natwest thing, they can offer the loan.......withdraw it at anytime before completion.

They would do income checks with payslips, bank stats should reconfirm.

The only time you should sweat is if your app goes to underwriters, then they will ask more and pick holes. Sounds liks yoursbis a processing issue.

90% new build is bugging me!!!!!

Great name vaseline by the way.

mimimt

vaselinequeen wrote: »

I know Simon, bit odd I thought too; they said they could only go to 85% for first time buyers unless it was new build!

OP, did they mean if it's new build the LTV would need to be lower than 85%?

I just checked their lending criteria which says max 80% LTV for new build flats for first time buyers

http://www.abbeyforintermediaries.com/content/mortgages/lending-criteria

Thrugelmir

vaselinequeen wrote: »

I'm concerned that if they only look at my statements in this period, it looks like I overspend my money and can live in my overdraft, which I do not. This month I received my bonus so it's all cleared off and I am in the black, so certainly the month of March will reflect my normal spending.

And if you hadn't of received a bonus?

An underwriter will be looking for sound personal financial management. Not someone who may struggle to pay the mortgage if an unexpected financial issue crops up.

vaselinequeen

Thrugelmir - to be honest that's what I would think too. I knew I was getting a bonus in December.

To be honest I doubt I will get it, but wanted some insight from these forums to prepare myself.

Take it all mortgage lenders look at the same thing when it comes to affordability?

Mimimt - they said if the flat is old, the max they can lend is 85% LTV, and only if it is new can they lend 90% LTV...

Simon - there's not even an issue as yet, I'm just concerned that there will be, and I imagine this will go to the underwriters. They've not actually asked for payslips as yet. Thank you for the compliment, I constantly use lip balm, that's why!

vaselinequeen

bumping - can any resident brokers provide an insight please?

vaselinequeen

bumping - anyone??