Mortgage declined, help!

marathonic

Thrugelmir wrote: »

How will you afford to maintain the property? There's more to ownership than paying a mortgage.

Ideally your mortgage payment needs to be far lower than your current rent.

Would that not depend on the type of mortgage? It'd obviously be the case for an interest-only mortgage but I think if your mortgage payment is the same as rent on a repayment mortgage, I'd see it as a good position.

If the mortgage payment is higher, it would be more difficult to assess.

ViolaLass

marathonic wrote: »

Would that not depend on the type of mortgage? It'd obviously be the case for an interest-only mortgage but I think if your mortgage payment is the same as rent on a repayment mortgage, I'd see it as a good position.

Interest rates might go up, which directly affects (most) mortgage payments, but does not directly affect rent.

Thrugelmir

marathonic wrote: »

Would that not depend on the type of mortgage? It'd obviously be the case for an interest-only mortgage but I think if your mortgage payment is the same as rent on a repayment mortgage, I'd see it as a good position.

In the current market even if you could obtain an interest only mortgage there seems little point. As you merely expose yourself to the risk of higher interest rates in the future. Which reduces the likelihood of ever repaying the capital debt owed.

Simon_gloster

Thrugelmir wrote: »

In the current market even if you could obtain an interest only mortgage there seems little point. As you merely expose yourself to the risk of higher interest rates in the future. Which reduces the likelihood of ever repaying the capital debt owed.

Thruegel, laying a golden egg or obtaining an interest only mortgage in todays climate? Answer?

Clue (cluck cluck)

Dave_Ham

Whilst I agree with the sceptics about the sense of a mortgage with this financial summary.

That said, if you wanted a mortgage other things being equal you will get one - given information declared.

Ing have some of the top tier rates and are therefore mega selective...

Good luck

Tirian

ACG wrote: »

The application would have asked where the deposit came from. It has to to cover money laundering regulations.

The fact that its informal wouldnt matter its still a loan as it is expected to be paid back - but thats a different issue.

Not so sure about this. The origin of the money matters for money laundering checks, but the banks only do that because they have to (i.e. legislation requires them to). They don't really care much where it comes from for their own sake - what they care about is risk.

Without a contractual arrangement for the repayment of the deposit, the risk actually lies with the dad. If son gets into difficulty then he will cease paying dad before he ceases paying bank - or at the very least the bank will have first legal recourse to the security (house) with no competing claim. That's what they're really going to care about.

As i said earlier though, your not managing your accounts in a great way. It looks bad. As the deposit is a gift it also means you havnt actually saved anything so i think you will struggle unless you go to a lender more willing to lend and with less strict criteria.

This is a different matter, and quite valid. ING are indeed very finicky - we are applying for a mortgage through them, with c. 50% deposit and joint (pre-tax) income of c. 90% of the loan. They still came back to us because I had sent them my March payslip and they wanted to see the April one too in case I had lost my job in the meantime! This despite the fact that we are borrowing less than 3.5x either of our salaries!

samtoby

sp5291 wrote: »

I have been in the process of applying for a mortgage with ING for 6 weeks now, only to be told today that my mortgage has been declined on affordability grounds.

The mortgage amount is £129,500 on a property priced at £185,000 (70%). I earn £34,115 gross per year.

The reason that they declined is that currently I am close to the limit on my credit card (£600) and I use my small overdraft most months (£250). I also had an unarranged overdraft fee 3 months ago as I exceeded my limit by £1.50. I find this confusing as I currently pay £600 per month in rent which is close to the monthly payments proposed on the mortgage.

I am wondering if it is worth persuing a mortgage with another company? If so, would paying off more of the balance on my credit card (currently at 0% as a balance transfer) and removing my overdraft facility help?

I am reluctant to give up as I have already sunk money into the property (solicitors fees and surveying costs). Ideally I am looking for a 5 year fixed deal.

You want to borrow nearly 130k and have been maxing a £250 over draft and have a credit card at its limit at £600 :eek:


I think before you borrow over 180k from various places you should look at your finances. You maybe paying rent but this doesn't mean you will pay a mortgage.

Before taking on this debt think wisely do you need a property of this price, can you afford it with out going in your over draft? It does concern me your earning 34k and paying £600 rent have minimal debts and are using your overdraft.....where is the rest of the money going?!

DannyboyMidlands

So you are up to your credit card limit, constantly overdrawn and lying about the source of your deposit which is actually a loan from your dad cos you never save any money? Sounds like ING just made a very sensible decision.

Conrad

brit1234 wrote: »

:eek::eek::eek::eek::eek::eek::eek::eek:




Sorry but you have showed no ability to save a deposit, you are living beyond your means and you are technically wanting a 100% mortgage. I can see why they turned you down.

Sounds like me and most of my mates when we first bought houses. Guess what, none of lost our home, shock horror, we actually managed and that was with far far higher rates (my first rate was 9.1%).

Lets always keep in mind that more than 99% of owners never get repossessed.

You guys are so short sighted. Only yesterday I had a new client that when times where tough, they fostered kids at £600 per week per child (in the South East).

People mainly do survive you know!

zxspeccy

I would think long and hard before committing yourself to a 100% mortgage, which is what this basically is. You are very fortunate to have family that are willing to support you financially with buying your first house. However there is a lot to the upkeep of a house then just the mortgage, you would need to be paying a similar amount to your mortgage each month to cover the bills. Gas, electric, water, phone, internet, tv, satellite, food, insurance and council tax all need to be considered. Have you drawn up an expenditure form so you know what your new outgoings will be? What about stamp duty, legal fee, fees & charge are all these covered as well?

It is all very well getting onto the property ladder, isn’t this house a little bit of a stretch for a first property? Could you not go for something a little bit cheaper?

I spent nearly 10 years saving for my deposit for my first house, which meant that I could comfortably afford the mortgage repayments. I have since moved to a bigger house but will still be in the position to repay my mortgage off completely in the next couple of years. Therefore I find myself in a very fortunate position, but only because I had saved very hard and planned everything in advance very carefully. Do not feel you have to rush into buying a property, I don’t think house prices will be doing much over the next couple of years so there is still time to get saving and practice budgeting for the future.

Also you mention you have a guaranteed payrise later in the year, I assume you mean you have a “cast iron” written confirmation from your employer about your increase in pay that will commence on a certain future date. Because if not then it is not guaranteed.