Large Deposit but turned down twice for a mortgage of 50% less than our current one!

ThingsChange

Yeah I thought they'd be nervous about that. My partner is owner of the business and I'm a self-employed freelancer - so I guess that doesn't help. The deposit is all equity in our current house - we put down a very healthy deposit when we bought it. We have another app in now so fingers crossed - hopefully it doesn't go to the underwriters as that's where we get stuck. Its frustrating because our credit history is squeaky clean. All the actual contacts at each lender were confident - then the underwriter turned it down - our broker has been flabbergasted and embarrassed as he's been confident each time based on initial feedback from each lender. I gotta go now and say a little prayer to the God of Mortgages! Many many thanks.

Dave_Ham

Good luck - pray to the God of mortgages your broker has not put the latest effort to Santander

ThingsChange

Yep - we'll give Abbey and Sandander a miss. Thanks.

Thrugelmir

ThingsChange wrote: »

Both lenders were sniffy about the credit card debt -

£20k is a significant debt to undertake. Given your business made no profit last year. Whether its significant or not is of no consequence. A sign of a healthy business is retaining profit that's added to reserves. As its this that gives the business strength through difficult times. As to an underwriter the balance sheet is equally if not more important than the P&L.

Sheldor

@ Thingschange: I'm in a similar position having just been turned down for a £12k mortgage with HSBC (already have 88k mortgage with them).
I use one credit card like a current account and pay it off in full every month. I have another with £4k on interest free until November - but I have savings to cover that - and the reason they turned me down apparently was that i don't have sufficient funds to cover the payments. This is absurd as my mortgage payments 5 years ago were about £70 more than I would be paying now if they gave me the extra money, and I was earning less then too.
It seems to me that the banks are just taking this cheap money from the BoE and sitting on it for their own benefits.
Does anyone know any way I can appeal their decision succesfully?

Thrugelmir

Sheldor wrote: »

It seems to me that the banks are just taking this cheap money from the BoE and sitting on it for their own benefits.
Does anyone know any way I can appeal their decision succesfully?

With regards to cheap money being available. That's an over simplification of a complex situation.

As for an appeal. You can ask for your application to be reviewed. But acceptance is at the discretion of the lender. As there's no right to the mortgage.

Banks 5 years or so ago lent far more loosely. Those that did paid the price. So there's little point in making comparisons. The world has moved on financially to a new era where there isn't the availability of easy money.

opinions4u

From my underwriting days with Halifax I can assure you that I would not be busting a gut to find a way to lend money to the owners of a loss making business, where 2011 performance is worse than the previous year, with £20,000 of credit card debt thrown in for good measure.

Why would an underwriter want to stake their reputation on it?

Conrad

Basically you all have bad brokers. Get a goodun and this should be sorted.