Want to buy a new home but refused mortgage

Twinmama

Will try and be brief
Bought our home with Skipton mortgage five years ago, no issues with payments. Husband in good job ten years same company, salary this tax year 111k. Coming year increased to £120k with 20% bonus plan. Credit card debts between us of around 18k with 2 car loans totalling £400 per month repayments. Living comfortably within our means. Manage to save around £500 per month for holidays and other luxuries. I don't work, have three year old twins.

So, looking to upgrade, will have around 15% deposit and cash for stamp duty fees etc on 380k new house (current place will sell for 290k, current mortgage 215k).

So far, so good - but!

Called Skipton today for initial chat inc credit check only to be turned down. On enquiring why was told I have a delinquent card on record. I was well aware, it's a card with around 400 balance which I failed to pay for three months when my mother was dying of cancer and I had small children to care for. It was the only bill not paid by direct debit and simply fell through the net. As soon as I actually opened all my accumulated post I called and made an arrangement and have been repaying at £25 monthly by DD ever since. All this occurred middle of last year. Otherwise without blemish and husband has no defaults or late payments etc.

Questions are:

Is it worth withdrawing joint application and hubby applying solo? I have no issue with this.
Is there anything I can do, for example repay the card debt in full which is easy to do I just don't know if it's worth my while as default will of course still show.
Is this a bit harsh given all the other positive stuff?

Thanks very much for any help or advice x

Dave_Ham

Hi there,

Paying off will help rehabilitate your credit report quicker. As will running any other existing credit lines you have.

Best thing in the short term would be to put in hubby name only. Some banks may still credit score you as "a family" as you are financially linked.

Skipton whilst having good rates are relatively strict so if they do say no, it does not mean other banks will.

Good luck

Thrugelmir

Twinmama wrote: »

As soon as I actually opened all my accumulated post I called and made an arrangement and have been repaying at £25 monthly by DD ever since.

On a £111k income?

Lenders would question how you manage your personal finances.

Annisele

Twinmama wrote: »

As soon as I actually opened all my accumulated post I called and made an arrangement and have been repaying at £25 monthly by DD ever since.

That part stood out for me too. I'm not entirely sure what you mean by "an arrangement", but usually people come to arrangements with their creditors when they can't afford to pay the entire debt. So, it *looks* like you defaulted on a £400 debt and then couldn't afford to pay it off. I appreciate that may not be the actual situation, but it does look very strange indeed.

Mara69

I wonder why it is the higher the earners the bigger the debt? OP states that they are living 'comfortably within their means' but has credit cards of £18K!!!! Then, despite apparently being able to save £500 per month has to make an arrangement for £25 per month for a piddling £400 debt - even I, on my much smaller salary could pay this off in one month! Doesn't add up at all.

opinions4u

Even forgetting the unfortunate credit card problem and the sad circumstances around it ....

.... you are up to your eyeballs in unsecured debts. Why?

katejo

Mara69 wrote: »

I wonder why it is the higher the earners the bigger the debt? OP states that they are living 'comfortably within their means' but has credit cards of £18K!!!! Then, despite apparently being able to save £500 per month has to make an arrangement for £25 per month for a piddling £400 debt - even I, on my much smaller salary could pay this off in one month! Doesn't add up at all.

I absolutely agree. if you can save £500 a month, then you should use one month's worth of this money to clear the card completely. The claim of 'comfortably within their means' is completely incompatible with 18K debt on credit cards. I am on a much lower income than this family but I would feel uncomfortable if i couldn't completely clear my credit card each month. What would happen if one of them became ill and unable to work for a long period? I would not take out a new mortgage if i had other debts of any type.

Twinmama

Oh my, some of you are really not being very nice!

Could I ask you to note I got into card trouble when my mother was dying, in agony, with cancer? A few months ago? Of and funerals don't come cheap btw.

I don't have any problems paying my bills, our credit cards have zero interest and we tend to repay on chunks. However recently paid for expensive holiday and some other large purchase. At interest free and prolly have repaid in a matter of months.

Anyone else want to have a pop at an innocent question?

Mikazaru

I don't think people are being intentionally harsh, they are just pointing out that having an income of ~£5000 a month but paying off a debt at a rate of £25 a month will not look good to a lender. Can you pay it off in full this month? Is it possible to have a frugal few months to pay down the credit cards?

opinions4u

Anyone else want to have a pop at an innocent question?

You wanted advice on how to get a mortgage.

I asked a question that a mortgage underwriter would be likely to ask.

Sorry for trying.

ALIBOBSY

I realise the OP is a bit upset at someof the replies, and TBH people on here (and on forums in general) can be a bit harsh (or at least come across that way).

But to the OP I have to point out the salary you are on would seem massive and certainly "rich" to the vast majority of people. We wereputting away £500 a month on a MUCH lower salary than thata couple of years ago. Even with the increased mortgage and higher bills (I assumeyour house is bigger than ours) on that salary I would expect to save at LEAST £1000 a month if not more and have no debt other than the mortgage.

To be frank on that sort of income whilst the banks might accept an explanation that the card got forgot (easily done at a difficult time mine sympathies and condolences, cancer is horrible and it must have been a hard time in your life) they would expect as soon as you noticed you would be able to clear a balance that low on your income straight away. Otherwise how can you produce the extra income to cover the increased mortgage you want. They are looking to see if you can afford the higher payments and these days they are much more conservative about who they lend to.

I would say you need to pay that card off ASAP, and clear as much as you can from the outstanding balances all of which improves things in the lenders eyes.

Perhaps you would be better seeing a mortgage broker who could look at the circumstances and work out which bank might accept you.

It would help alot if you could save upand put a bigger deposit down as well.

Good luck
Ali x