First Direct AIP - Strong change of mortgage or not?

gadge

*stronge chance, not change!

Got an AIP from them last week. Paid the £999 fee to hold the intrest rate.

I'm just a bit worried if the mortgage will go through or be declined once they see the bank statements, as i have been dipping into overdraft (£2-300 of a £2000 od). This is only due to the wife being off on maternity and me paying for things she would normally pay for.

I have to provide a back to work letter for the wife also, from her employer.

Will they take this into consideration?

Gentoo365

I am in a similar situation (but without the overdraft). There are a few complications with my situation. Non standard pay, credit card debt (now paid off, no missed payments), recent pay rise and low LTV.

I have been waiting for a decision for a while. I was asked to supply a letter form employer. Sent over a week ago. They are on a backlog though so it has not been processed.

My affordability is fine 'in real life', but due to being on a lower basic salary for a long time (and paying for postgrad education) I did have debt. Debt has been cleared by bonuses and basic salary has been increased. So (quite rightly) my case will probably need to be approved by underwriters.

Hopefully the fact that my debt has been managed impeccably will work in my favour. My worries are as follows:

1) Now I have paid off all my debt I have less room to manoeuvre with deposit. So if the valuation comes in low, I cannot meet the difference.

2) I have a large amount of unused credit. At one stage I had almost £28k of credit available on various cards. Using about 6k ish. I have reduced the debt to zero, and cancelled 3 cards so now I have around 20k of available credit. I am concerned that this will somehow count against me. I cannot get the cards cancelled quickly enough though. As it is surprisingly difficult.

Either that or they will see that I can be trusted not to max cards out. No idea.

With regards to your own situation I would imagine that they will look at the long term and judge if you and your wife could afford to maintain payments if rates rise, your family increases and living costs rise.

If you are on the boundary of affordability now, then they could consider this to be a problem in the future.

Either way, you have passed the initial checks, and you have sent the letter, so there is no need to worry just yet.

Thrugelmir

gadge wrote: »

as i have been dipping into overdraft (£2-300 of a £2000 od).

Why haven't you been using your savings?

Gentoo365

I will answer the above question regarding my situation. (i.e. having savings and also credit card balance)

Sometimes it makes more sense to go overdrawn for a few days rather than transfer a few hundred back and forth from savings. Especially if the money is in a cash ISA.

In addition there was a time recently where 'size of deposit' mattered more than 'amount on credit cards'.

As I mentioned above, one of my concerns is that I have paid off 'too much' of my debt and that the money would have been better used to increase the available deposit.

Anyway, I have now decided that the correct way to deal with regular monthly spending is to use a credit card, then pay it off in full every month.

gadge

Thrugelmir wrote: »

Why haven't you been using your savings?

Savings?! i dont save, not to i could save though.

Gentoo365

I assume you are re-mortgaging then?

Not that I am recommending anything. However if you are only going overdrawn by a few hundred each month, why don't you just pay on card for some stuff, then pay it off when you get paid?

If you pay it in full you save interest too.

Obviously not a solution if you think it may escalate.

gadge

Yes, sorry should of said, re-mortgage on a new(to us) house. Sooner use the overdraft instead of a credit card, usually only in it for a week or 2.

Gentoo365

Well I don't know what First Direct's underwriting policy is. However I guess they would pay more attention to the long term viability of the loan rather than a few hundred of overdraft used for a few weeks.

The thing with mortgages is that there is not much you can do but be honest, supply the information they need and hope that they are able to lend to you.

gadge

Just got a text saying mortgage approved and there now going to do the bank account checks because thats a term of the mortgage, i have to bank with first direct. Fingers crossed!

greenjellybean

Dont speak to me about First Direct! I have just been turned down by them, 10 days after my initial phone call with them when everything seemed fine. I am looking to rent out my flat so they said they would normally want 3 years tax return to see how much income the flat generates (I think that's what they said, I didnt know a 'no' was coming so I wasn't properly taking everything in). I asked what I could supply but the advisor said "nothing, it's just a decline".
I know they are particularly stringent but they could have let me know earlier that they didn't want me!