Mortgage offer ran out/now declined on affordability

kerryjayne21

Our mortgage offer on a house we are purchasing recently ran out due to an issue with our current property's deeds. We had to fix a problem with incorrect garage showing on our deeds which took a while to rectify. There has been a huge catalogue of errors for us stemming from the deed errors (which should of been noticed), which involve our solicitor, previous solicitor, housing association (shared ownership) and Santander - everyone has made mistakes.

8 months along and we have just applied for another mortgage. Santander refused to extend our offer we believe because their rates increased, however this was declined today on affordability. We found the new details we had to give on our expenditure rather excessive. It ended up that we had £45 spare a month IF interest rates increased - our adviser at Santander didn't think this was an issue at the time. Our current mortgage is with Santander on the property we are trying to sell, never made a late payment.

My question is can anyone advise as to what kind of level of affordability we need?

The property is a 50% shared ownership at £89975
We have a 20% deposit

We are also wondering what the best course of action would be? We have an extremely impatient housing chain after this huge wait for us, we are lucky they have put up us with this so long so feel the need to stay with Santander as they are the only one who can get this done quickly, without the need to re-apply to another lender.

The options are, which will involve parental help which we would like to avoid:

Increase deposit
Pay of car loan (110 a month) - 4800
Pay of a credit card debit we have been moving between interest free cards - 2400

Any advice would be hugely appreciated!

Kerry

Dave_Ham

Santander's world has changed in the last 8 months I am afraid and they are much, much harder to please.

Give your broker/branch adviser a call and say if you pay off the unsecured debt does this problem go away. If the answer is yes, then you at least know what you can do to get this dealt with quickly.

For information, the loan will be hurting affordability more than the credit cards.

I would suggest given Santander's recent behaviour that you get a backup plan ready in case, hoping you do not have Early Redemption Charges on your current Santander mortgage...

All the best

kerryjayne21

Thank you for your response, unfortunately we never used a broker or a branch we called directly as they were our current lender. I did consult a broker briefly after the offer ran out and he suggested reapplying through Santander as they were the only people in a position to deal with it, with any speed as they already had plenty of information on this.

Our adviser at Santander hasn't been a great help to us at all - many idle promises of callbacks that never materialise.

In short, Santander are part of the cause of this they took 6 weeks to sign a deed of substituted security ( I think that's what i was called. Our garage was the wrong way round with our neighbours on the deeds). Then told us it would be no problem to extend our offer by a week or two and someone would callback. The call back never happened and when we called we was told that no we couldn't extend the offer. Had they of taken a more reasonable time to sign we would of already been in the other house by now.

We would really like to avoid having to ask parents to pay off the car. We are hoping that some adjustments could be made to the expenses as they are rather silly. To us, we deem what is spent on holidays, days out, birthdays ect as irrelevant as if we need to make cut backs to pay our mortgage that money would not be spent.From what we gather, Santander were only unhappy with affordability and have referred it back to the adviser (who never calls us back).

Am I right to assume that we would not have any ERC's? Our mortgage deal ran out in Feb and wasn't looked at as we were due to move.

Are you able to suggest a lender that would potentially offer a mortgage on a 50% shared ownership house, 20% deposit that would acknowledge tax credits for a back up plan.

Thank you for your advice, I very much appreciate it!

Dave_Ham

Whilst I may agree with you on the affordability issue, Santander will not. They put it what you are paying and what they are happy with and it is all pre-determined.

You should be free of all penalties, aside from the discharge fee of £225 (I think)

Its hard to name drop lenders without full sight of everything and unfair to you also.

I would visit a local Santander, see if they can take over and get a quick decision either way.

Shared ownership on your value and with your deposit is not necessarily an issue for most lenders, if affordability is supported by tax credits this will throw a few lenders out.

Remember the quickest and most flexible lenders in your situation, may not be the best rate wise..

May be worth speaking to a recommended broker, or have a real good look through this forum and you may find some answers on the more flexible banks and check they still accept tax credits, although you will need to be super specific in relation to exactly what type of credits you receive.

Good luck

kerryjayne21

We receive around £110 a week in child tax credit and negligible amount in working tax credit (£10 a week I think). My partners salary is £18000. I believe Santander also factored in CSA payments to us at £248 a month. We are a low income family currently. I will shortly be going through the UCAS applications process to study nursing so our plan is in several years to re-assess the mortgage/rates and drastically decrease our mortgage term once we have two incomes.

In the meantime, we have no doubt that we can afford the new house. It's where my partner works so whilst the mortgage will rise by £100 a month we save that if not more in fuel costs. As its Santander's money they have every right to be fussy I guess.

I honestly wouldn't know where to look or to ask for a recommended broker. For us right now we need a flexible and quick lender rate is not a major factor after all we have been through. Our estate agent who we are selling our property with (Connells) seem to suggest that we should of used them for a mortgage every time we call to update them on the situation. Would it be worth contacting them?

Once again thank you for your reply

Dave_Ham

Look up Connells Mortgage on these forums and see lots of real people give their opinions on their service and offering - not a nice read..

This looks on the face of it to be relatively straightforward. Santander may actually buckle if you went in to a local branch and asked the question - you may need to re-supply everything though as last time was a long time ago...

All banks will factor in the CSA payments and the unsecured commitments, which although tight is backed up by a good deposit...

kerryjayne21

Thanks again for the reply!

I shall have a read about Connell's now. Their "well, you should of used us" did raise my suspicions in them as it seems a bit pushy. We resupplied Santander with all new copies of everything for the current application.

My partner thinks he may have overestimated the fuel spend on the expenses form. He thinks that he used our current fuel spend and not the new one. That would free up around £100 a month. Hopefully, we can put this to them without them thinking we are trying to deceive them. The feedback we received today on the decline and it being referred back to the advisor makes us think it wasn't to far off being affordable their end and it was confirmed that this was their only issue. I guess when the advisor finally returns to office and calls us back we can ask what do we need to do to make it affordable?

Conrad

It will almost certainly fail via Connels - these big bucket shop types firms are just no use for cases like yours.

I agree with Hamman, find a small decent experienced broker.

kerryjayne21

We are in touch with our local branch now. The person we need to speak to will be in tomorrow and we will ask they take over our case. We are going to find out if we pay off the credit card and/or car will that appease them.

I will report back the outcome in the hopes it may help some else

Thrugelmir

kerryjayne21 wrote: »

Pay of a credit card debit we have been moving between interest free cards - 2400

Santander will have detected this. So your 20% deposit as such doesn't exist. As you borrowing the money to fund the purchase.

Dave_Ham

Ensure they deal with it quickly, tell them you do not mind if it is declined so long as they do not drag it out as your chain may lose patience.

Good luck