£4,200 net income per month and can't get a mortgage!

opinions4u · 4 April 2012 at 11:01AM

nibs wrote: »

The OP has asked for advice re her mortgage application.

And has received some excellent support in a range of posts.

Some of the replies from you and a few others have been regarding her lifestyle and attitude.

If it's relevant to getting a mortgage then it's relevant to the thread. Lifestyle: Spend less money on other things = bigger deposit. It couldn't be more relevant. Attitude I'll look to highlight below.

These posts were unnecessary as OP wasn't asking for a lifestyle coach.

So responses shouldn't consider how to raise an additional deposit? Are you in the real world?

The posts suggesting 'see a broker' and 'save a bigger deposit' are helpful, but the ones criticizing OP are unnecessary and unhelpful.

My criticism came as a result of the original post and further responses from the OP. Nobody has a right to a mortgage.

lilygirl85 wrote: »

We have found a beautiful house that we would love to buy and have a 10% deposit, but have been refused a mortgage with NatWest on the basis that our credit rating is not good enough.

NatWest would not give any reason for their refusal other than that "the system said no". We have both banked with NatWest for over 15 years and are so disappointed that we have been refused without any real consideration.

They have considered your details and scored it against other applicants and their cut off point. Consideration has been given. Just because it's not some nice chap in a suit giving a different decision doesn't mean it hasn't been considered by a potential lender.

NatWest have said that they will only consider us if we can increase our deposit to 85%.

So the lender themselves thinks that a bigger deposit would help. So there is a human face to their consideration. The OP then goes on to say:

Frankly, that sounds ridiculous because it is not going to change our credit rating and shouldn't really change their perception of our risk level.

This is either ignorant or arrogant. I did explain "Yes it should. It reduces their potential loss in the case of them having to repossess". The response was:

I don't really see how a couple with our income can be seen as a real risk ... If a couple earning what we earn can't get a mortgage at 90%, who on earth can?

Draw you own conclusion as to how that reads. It was posted after an explanation of one element of mortgage lending risk (deposit size) had been explained.

To me it says "we're loaded so we should get whatever we want". So I posted:

opinions4u wrote: »

I really dislike the "we're a loaded solicitor and accountant so should automatically be given a mortgage" attitude.

The more I read it, the more I think I was right.

[Deleted User] · 4 April 2012 at 11:13AM

I still think their big mistake is going into Natwest (looking at their FTB mortgages they have terrible rates)... I still believe if your circumstances are fairly normal, then you can get just as good deals as brokers do (or better as I found out).

Just use the comparison websites and learn a lot about mortgages

Dave_Ham · 4 April 2012 at 11:57AM

ringo_24601 wrote: »

I still think their big mistake is going into Natwest (looking at their FTB mortgages they have terrible rates)... I still believe if your circumstances are fairly normal, then you can get just as good deals as brokers do (or better as I found out).

Just use the comparison websites and learn a lot about mortgages

Already broken my own rules this week, so what the heck...

Whilst your at it, sort yourself out a GasSafe/Corgi certificate and training and you can fix your own boiler when it breaks..

Whilst a normal mortgage can appear easy to broker, it depends on how much you value your time at.

The OP lets not forget is a qualified solicitor, with a charge rate at .... £

Cannot imagine it will be too many hourly rates to employ a decent broker on an independent basis to find, select and advise on the most suitable product. Key word being most suitable and not "cheapest"

Especially given the comparison sites will typically lead you to HSBC's door - and that is a whole new story...

blacksta · 4 April 2012 at 12:09PM

Wow

Life is full choices , what choice you make now can make or break the future.

[Deleted User] · 4 April 2012 at 12:14PM

Well, my charge rate is £80 - 105 per hour.. so i do know the value of time (IT Consultancy)

I've been very unimpressed the last two times I've used mortgage brokers. First time, I found the deal and presented it to him. We were FTBers so needed help going through the forms. Second time, I managed to get my First Direct mortgage sorted out on my own (after the broker couldn't beat what I had found).

Heck, I even found out 2 months later that First Direct had dropped their arrangement fees, phoned them up myself and got them to drop them from out mortgage (Remembering they told me they would match any changes they put on their website).

Frankly, i found it more time consuming to figure out what car insurance to go for than to find my mortgage deal.

My dad would agree that you should figure out how to fix your boiler when it breaks thought

princeperch · 4 April 2012 at 12:21PM

to assist the op my missus and I were in a similar position July last year. we were 26 at the time, both lawyers, and net 5k between us a month.

we were renting in london where we both work, paying about 1100 quid a month, and every year that went up.

so we saw a lovely flat in a converted factory that went on at 300k in 2009 and whilst it went under offer a couple of times but the guy was getting desperate to sell it. as it turns out, the flat next door is identical and rents for 325/week, so even us buying it with a 90pc mortgage wasnt all tha different to renting it (repairs etc asides). the bloke wasnt happy about it but he accepted our offer of 250k.

all the banks I contacted us would lend to us but some thought the flat a new build (it was converted in 2006) and therefore wanted 25pc deposit which we didnt have. so we went with the coop and put down 10pc on the nose, no fees, no stamp duty.

the catch? 6pc rate. which isnt great. but I knew the flat was a bargain (as much as London property can be) and resolved that we would overpay it over the next year then remortgage it at about 3pc (which has cut our payments from 1400 pcm to 967 pcm). the remortgage is going through now and will complete in the summer. ive had to pay a 3.5k ERC but again, im an adult and knew this was on the cards.

as an asides ive had the flat valued at 300k by 3 agents recently and I think we would get a figure of around that if we were to sell - possibly about 290k or so, based on comparables that have sold in our bit of london in the past 6 months.

my advice:

putting down 10% you will get rumped on the rate. I didnt mind so much because we could overpay it 2k a month and remortgage it. you should be able to do this too. so make sure you get only a 2 yr deal, one that is fee free, or that has low-ish ERC. if you can overpay it by 10% over the next year you will pay a much better rate..

Dave_Ham · 4 April 2012 at 12:37PM

ringo_24601 wrote: »

Well, my charge rate is £80 - 105 per hour.. so i do know the value of time (IT Consultancy)

I've been very unimpressed the last two times I've used mortgage brokers. First time, I found the deal and presented it to him. We were FTBers so needed help going through the forms. Second time, I managed to get my First Direct mortgage sorted out on my own (after the broker couldn't beat what I had found).

Heck, I even found out 2 months later that First Direct had dropped their arrangement fees, phoned them up myself and got them to drop them from out mortgage (Remembering they told me they would match any changes they put on their website).

Frankly, i found it more time consuming to figure out what car insurance to go for than to find my mortgage deal.

My dad would agree that you should figure out how to fix your boiler when it breaks thought

I would imagine you would find the world has changed since you initially got this deal, but fair play you are pleased with yourself.

Next you will tell me it was the Estate Agency Mortgage Brokers you relied upon.

As an IT contractor, I am sure you will recognise that I am sure you undertake contracted work to make a printer set as default through to installing and networking 100's of machines with separate servers and the key here is that everyone's needs, capabilities and circumstances are different and I am sure you appropriately provide a solution that meets/exceeds that.

So had this been a post on on IT forum about a horrible little virus affected our network and causing distress, me posting on saying why don't you Google the problem as sure you can read up and find a solution may not be super helpful or a tad insulting to the IT peeps on there.

That said, you got a good deal and well done for chasing them down afterwards. Would like to see them agree to this in the current climate..

star4876 · 4 April 2012 at 12:42PM

Not sure why people are getting so carried away with what these people spend their personal finances on, on a monthly basis, that wasn't ever the question

The question was why are we struggling to get the mortgage, the answer is because the 90% deals are few and far between nowadays, regardless of how long you've been banking with Natwest or how much you earn.

Your job might be permanent but redundancies are rife at the moment so that only goes so far, as does your credit rating.

The best advice is to sit down with a broker and go through what is actually available and achievable to you. Something I see you've already instigated - so good luck with that

All I can say is the extra 5% makes a huge difference to both the product availability, and the product affordability. We looked at going for a more expensive house with a 10% deposit, or going for a smaller house with 15%... the difference was incredible. Monthly repayments dropped from circa £800 to £500. If your family, friends, selling a car, and saving up any extra money won't get you to your 15% then I'm afraid the best thing to do is wait. I can't see property prices shooting up any time in the immediate future....

Good luck with the wedding

[Deleted User] · 4 April 2012 at 12:50PM

No, brother-in-law recommended me a broker. I still regret letting the estate agent suggest someone to do our EPC (after finding out you could get one arranged yourself for half the price)

The mortgage started in November 2011. (3.49% 2 year repayment tracker, 4x joint income, 85% LTV). They even threw in a free home buyers report. The world hasn't changed much since then! Before that i was on Nationwide's BMR IO (Yes, i know that was silly)

I do believe that if you've got complex circumstances a broker can be invaluable, but the OP doesn't seem to be in that position. They aren't even looking for a very big mortgage compared to their income. I still remember Halifax refusing me a current account and being very annoyed they wouldn't explain why.

Personally, if my bank refused me a mortgage then couldn't give a reason, i'd be demanding to talk to a supervisor and discussing how I could move my personal banking away from them.

The number of times i've fixed my colleges problems with a quick Google you'd wouldn't imagine...