Lending criteria help - particularly N&P

Lapid

Hubbie and I are looking at remortgaging as our current deal has just ended. Both have good credit score, no previous financial issues. Currently on a 75% LTV offset mortgage, but want to borrow additional funds for home improvements, so new LTV will be about 80%.

I found online that Norwich and Peterborough have a good offer for tracker mortgages so went through a telephone interview today. Our combined earnings are £58,000, after usual monthly expenditure, we'd have about £1700 left before mortgage and yet they said the most they could lend us would be £62,000. We were looking for £160K!!!

I was gobsmacked as I know that lenders are more selective but this seemed really harsh. The lady I spoke to couldn't offer any explanation, and did not want to and may as well just have said "computer says no". I rang back to double check the figures I'd given her in case I'd got it wrong, and she was quite rude, but reluctantly double checked and said they were all correct.

Does anyone know what sort of margins lenders are looking for on income vs monthly expenditure? I am very reluctant to go through another mortgage application as I don't want loads of hits on my credit history so would appreciate any advice anyone can give.

Thank you.

Thrugelmir

Do you owe much in the way of unsecured credit?

GMS

Loan available will differ hugely between lenders. Considerations will be term, credit commitments, dependants, credit score etc.

Some lenders will include child care, others may not.

On a 58k salary to be offered 62k would indicate short term, children or high credit commitments.

Post more information for a more accurate response.

A broker may be worth a call to see what can/cant be done

Lapid

We have a car loan, £9,000 over 4 years. We have 2 children and our child care cost is £140 per month, both those costs were included in the expenditure given. We are looking for a 23 year mortgage term.
We do have 2 credit cards but they are paid off in full each month.
Thanks

ACG

Most lenders would look to offer between 3-4.5 times your income.

So to be offered a little more than 1 times your income indicates either something is wrong or we havnt been given all the information.

Could you let us know your individual incomes, how much you receive in tax credits and whether or not that is included in your incomes. If you have kids how many, how old.
Any other debts? CC/Loan/HP etc?

Did they do a credit check at all?

Thrugelmir

The offer must have a been way of declining your business.

Why haven't you approached your existing lender for additional funding.

Lapid

Incomes are £43k and £15k, hubby full time, i'm part time. no tax credits, we get child benefit but they don't take that into account as income. Children are 3 and 6. Loan info is above, they did do a credit check.

This is why I'm taken aback. If we had loads of Unsecured debt I could understand it, but it's only the 1 loan.

The only thing I can think is when she asked me what our current mortgage payment was, did she put that as another outgoing bill. I asked her when I rang back and she said she didn't.

Lapid

Thrugelmir wrote: »

The offer must have a been way of declining your business.

Why haven't you approached your existing lender for additional funding.

I have, and in principal they can for an extra £130 per month, we!re with first direct and there are quite a few better rates out ther. The rate N&P had would have ment that our monthly payment would be the same as it is now, even including the additional borrowing. I didn't do a full application with current lender, just an in principal.

Thrugelmir

Lapid wrote: »

we!re with first direct and there are quite a few better rates out ther.

I'm surprised that N&P have a lower rate than First Direct.

Have you factored in the cost of remortgaging and product fees into your calculation?

Did N&P ask what the additional funds were required for?

ACG

maybe they have taken into account your credit limits on your credit cards?

I once seen someone have about £70k available to them on credit cards and they were only earning £20k