First direct rejected us.

JC_Derby

Evening..

been rejected an offset (re)Mortgage by FD as other half is currently on maternity allowance (self employed with no return to work date as yet - planned circa August/September).
LTV of the mortgage is approx 51% however there are further savings which when took into account took the LTV down to 30%. In fact it turns out if we liquidated everything ie shares and all savings we could have a LTV as low as 20% -
Does this make sense do i need to say how much the house is worth and vlaue of borrowing.
Anyway the reason i went for teh fd mortagae was it was fixed for 3 years as 2.79% at which time i could reinvest savings at a beeter rate to repay the mortgage quicker.
Anyway my question - im guessing FD were going to say no whatever.
Who could say yes?i dont want to stay on the ever increasing Halifax SVR

GMS

What is your income and what was the loan amount?

First Direct are picky and pretty tight on affordability.

[Deleted User]

FD won't go over a 4x joint income from my experience (although i was going for an 85% LTV mortgage at the time)

Simon_gloster

If it was declined on affordability, put your savings down or reduce your existing debt.

JC_Derby

my income is 32k (not including overtime which they dont allow)Mortgage would be 125k on property valued at 245k
OH income 19k when working
savings we said were 45k but approx 70k if everything used.
outstanding cc 4k at 0%

thats why im confused we shouldnt have any probs with this at all.
fd said even with putting the 45k down that they would not accept us due to other half not being guaranteed work and we needed a further income of £800pcm

GMS

They will be classing your other half as a dependant along with any children. This will reduce borrowing considerably.

Should be options elsewhere

bankersmug

I had exactly the same problem remortgaging on that same deal- I've never been refused credit in my life! Was really miffed as I'd got as far as the underwriter - a woman who by the sounds of it had never spoken to a self-employed person in her life!
My ltv was 43%, I produced 3 years of accounts and 3 years of P60's, bank statements the works, to their satisfaction.
This wasn't the problem apparently - according to her it was my 'ongoing affordability'. Because part of the job I do comes under PAYE and because March's slip showed a reduction in income she thought I couldn't afford it - the reason it showed a reduction was because my non PAYE earnings have shot up dramatically and I had less time to do the PAYE side of work!!! One letter from my accountant and a quick look over my bank statement could've confirmed that but she continued to obsess about this one slither of my income. She wanted me to provide a letter from one of the people to work for to confirm they could guarantee me work for the coming year - they are in cloud cuckoo land and don't understand the idosyncracies of self-employment.
In the end I went with Woolwich and completed last thursday. I'm paying £15 a month more than I would've with first direct, but I'm still saving over £85 a month compared to the Nationwide.
It just seems silly that FD lost a customer with a low risk profile and I lost a good deal because of some overzealous bureaucrat.

goosander

Sounds like you were rejected on affordability, probably due to (temporarily) non working spouse plus soon to arrive child.

I know it doesn't help you, but a couple of days ago I got approved for a 2.8% lifetime tracker on IO basis. My LTV was 56% and salary multiple was 4.3 but I'm single and PAYE with no dependants or debt, so probably a straight forward case.

JC_Derby

Thanks all
banksersmug what rate did you get with the woolwich?]
FD was 2.79 with 2k down as a fee
Goosander pretty much what fd do isnt it, they want you to invest to repay the remainding capital/debt as you only pay interest

bankersmug

JC_Derby wrote: »

Thanks all
banksersmug what rate did you get with the woolwich?]
FD was 2.79 with 2k down as a fee
Goosander pretty much what fd do isnt it, they want you to invest to repay the remainding capital/debt as you only pay interest

It's a 2 Year Tracker so base rate(0.5%) + 2.79% over 2 years, rising to +3.39% after 2 years. Fee was £999.

goosander

Actually they seemed quite keen to push a repayment style offset rather than IO. I explained that I intended treating the IO mortage as a flexible repayment mortgage rather than using a separate investment vehicle and they seemed OK with that.