Help! mortgage application now refused!

ladymarm

Posted about this recently but cicumstances have changed. really stuck on best course to take.

In a nutshell, partner and I separating. We own house together, tenants in common, unmarried with one child.
Plan was for me to buy him out and make mortgage in my name only.
House value (have had 3 valuations done lST WEEK) approx 150-160k
Mortgage outstanding £95k
My deposit which i protected with declaration of trust when made purchase -50k
Have paid of 6k of original £101k mortgage
22 yrs remaining on term.

My part time income £22,789 p.a (recently had baby)

Santander provisonally said 2 weeks ago i could take on mortgage in my name only. Today went into detail with them eg pension contributions, childcare costs and now they sAY no. my income doesnt support £577 pm mortgage costs.

I will be entitled to £133 pw CTC and WTCredits when partner moves out. Santander will include this in their calculations when i have it on my bank statements 3x but obv i wont get the benefits until he has gone!!

So catch 22 situation. I have suggested to partner that he moves out, pays his rent elsewhere whilst i pay full mortgage each month.Then in 3 months we will have proof of the benefits in my bank acc and i will be able to take on the mortgage legally in my name only. he is wary of this and i understand why but i cant think of any other option. He trusts i will pay the mortgage as he knows i dont want to lose this house or have terrible credit rating.

Can you advise on options for us? I feel i want to keep the house if i can because the payments are same or less than renting a smaller house because of the deposit I paid, also want some stability for my baby and for me, we will both end up with no money if we sell now as tiny amount of equity i can give him will be eaten up by fees.Thanks

kingstreet

I can't see any lender giving you a higher mortgage amount based on what you might get when your benefits increase.

How much are you trying to borrow?

harvey115

You should speak to a broker, I am sure there is a solution to this.

Santander has recently been almost unwilling to lend, so do not worry about it that much and speak to a good broker straight away.

ladymarm

£95k is mortgage outstanding. Santander say they will let me do it but only with the benefits added to my wage not on my wage alone (which i understand). But it's how to make it happen!

kingstreet

Are you applying for the amount outstanding on the current mortgage, or are you asking for more?

Do you have any other credit commitments which will continue after the remortgage is completed?

JPDurand

Hi Ladymarm.

Santander / Abbey have a specific calculator (like most banks do) that consumers do not have access to. They will take into account financial dependents (children) loans, credit cards, and other expenses.

As a mortgage broker, I would first and foremost do a budget calculation with any lender before submitting an application with them. Although you may think it is affordable, they have their own calculations. No bank will take into account any future/past earnings. Only current earnings.

There may still be options for you currently, but do speak to an adviser as the bank's staff are not always the best in assessing your needs and requirements.

Good luck!

ladymarm

I want to contnue with the £95k mortgage, not borrow more. i have no debts/credit commitemnts and excellent credit history but my income has dropped by 40% since i had a baby!

It is frustrating. My parents would come on the mortgage to help me but they are in their 60s so too old as mortgage term is curently 22years. i have some savings but not enough to reduce debt to 50k which is what Santander would prefer.

Our fixed term ends 2nd Dec this year, can I then search for another mortgage alone with another lender, might another lender be more favourable?

What do you think of my idea for ex pratner to move out whilst still on mortgage for 3 months?

kingstreet

Halifax affordability calculator indicates it would lend enough to cover your existing mortgage. The term of 22 years will be subject to you achieving an A pass. You might have to go back to 25 years.

Your likely acceptance of Halifax rates at your LTV I don't know, so you'd better talk to an independent or whole market broker for a full review of the lenders open to you.

Partner moving out? Your call, I'm afraid.

ladymarm

Thank you. I am confused.

Can i go to another lender at this point and remortgage with them alone? I have a fix with santander til Dec with some ERCharges i think which would be a shame to pay as it ends in Dec.

PS Whats an A pass?

ladymarm

PPS Santander say i have 33% LTV (valued house lower than Estate agents). Thought that was quite good?

harvey115

To avoid an ERC you can wait until December, however meanwhile no one is stopping you to shop around to get an offer from a lender for the time you will be able to re mortgage in December.

Seek advise from a good broker and you should be fine, here are the suggestions:

unbiased.co.uk - find a local broker to you
L&C - big company providing mortgage advise

You may also ask your friends and family, if they know someone they trust.

Hope this helps.