First time mortgage rejection query.

mjd87

I did think our (MY) low income would be a contributing factor. Fingers crossed for a new job soon, although Graduate + NHS + North East isn't a great combination atm. Anyway, although from what people have said it seems that we are in a decent position for a mortgage,there are plenty of factors that could be behind the rejection.

Fortunately we are on the way to getting a mortgage from another lender (boy do HSBC have good rates).However, I am still perplexed by our first experience of lending. One particular thing I am not clear of is whether HSBC were required to give us an explanation for the rejection? I'm not talking a thesis, just more than the 'computer says no' that we got. We were told "it wasn't credit history" and the guys we dealt with seemed happy enough throughout meetings but in the end the most we got was "we are as frustrated as you, but it says rejection and the system doesn't even tell us why..but if it did, we wouldn't tell you as it would allow customers to fiddle the system".

So, basically are lenders expected to be able to give a reason to lenders for rejection?

Thrugelmir

mjd87 wrote: »

So, basically are lenders expected to be able to give a reason to lenders for rejection?

No.

Lenders have the commercial right to decide their target market.

mjd87

Agreed, but there are many things the FSA make lenders do to make the process fair and transparent i.e. key facts sheet, no discrimination, using clear english etc. whilst still of course having the right to reject us.

I'd be surprised if the FSA says it is fine to waste 3 hours of your time, ask unnecessarily personal questions, do a credit check, try and sell you un-related products, serve up rabbish coffee and then turn around and say, nah. Just...nah.

Most consumer advice websites seem to imply that lenders are obliged to give a reason for rejecting applications. After all, for all we know they may have rejected us because we are not Married and they are Orthodox Christians hell bent of cleansing the world of sinners and heathens; more likely it is me having a !!!! job, but still, how do we know?

Brock_and_Roll

If they were forced to give a reason, a bank would simply say "you do not meet out credit criteria" - no bank could ever be forced to disclose their credit criteria and scoring.

If in the highly unlikely case that a lender was rejecting applications based on someones religion or sexuality, this would be a criminal offence and the offenders would find themselves out of a job and doing a stretch. As it happens banks will lend anywhere they think they can make money - for example Islamic mortgages are a big growth area.

mjd87

Fair enough. Probably naive but I don't see why banks don't have to disclose their credit criteria. It's a game stacked in the banks favour and after what we have seen this week, clearly they can't be trusted.

Thanks for all the help and advice

holyroller

mjd87 wrote: »

Fair enough. Probably naive but I don't see why banks don't have to disclose their credit criteria. It's a game stacked in the banks favour and after what we have seen this week, clearly they can't be trusted.

Thanks for all the help and advice

If they disclose it people will adjust their information to match the requirements and play the system (so to speak).

I applied for a mortgage with RBS before the financial crisis and was offered a certain amount 1% deposit. They asked me if I wanted them to save the details or I could reapply later giving my details again. They then told me if I claimed I had less children they would be able to offer me a higher mortgage :rotfl: and some people wonder how we got into this mess.

Also, as mentioned, on a joint income you get a lower multiple of your incomes. In fact sometimes you can borrow more if you only take into account one income.
To get a mortgage now I need to have a 20%+ deposit.

Phil_rich

Just give London&country a call, they are independant mortgage advisers and they will be able to pick a lender who will accept you. Your basic criteria is all fine so it wont take them long.

tulip5

well dont give up just because one lender said no doesnt mean the next one will! ideally now you should wait a year as a big rejection doesnt look good on a credit file, and save up more deposit, stay longer at the same address and also longer in current employment. I would get word of mouth on a good broker to use it will cost you but probably worth it. If you are desperate to go now still find a good broker, tell him every smallest detail and he can give you advice without doing a hard search and usually you wont pay them until contracts have signed, it all depends how desperate you are.

Mishomeister

Simon11 wrote: »

I've just got a mortage with HSBC for 2.8% life time tracker and I'm 23. I'm purchasing alone on a £125k property with £60k deposit with a £28k salary.

I would say that your deposit is rather too low, I wonder if 20% would have got it? I'm surprised that at your ages you've only managed to save only a tiny abit and relying more on inheritance...

Just wandering if the smart boy was able to save this kind of money by living rent free or for a very cheap rate with parents which is not an option that everyone has.

woody2234

qoute "Just wandering if the smart boy was able to save this kind of money by living rent free or for a very cheap rate with parents which is not an option that everyone has".

answer hes parents are bankers and they have a money tree in there garden