Does 5% extra deposit make that much difference..I guess it does

__Az__

Hi,

Looking for a bit of advice - reading threads it seems a similar story, any mortgage brokers out there lend a hand? :-) The story so far below:

FTB have 10% deposit
Have a decent job, salary, monthly car allowance and bonus means I make 65K per annum (base is 51k) Been with company 12 yrs.
No outstanding debt - no loans, CC generally gets paid off in full each month, no dependents.

Approached Britannia for a 3 year fixed LTV 90% got an illustration and AIP for 215K

Found a property and had an offer accepted of £193,500 - Great I thought much less than the AIP - so far so good!

Applied yesterday for the mortgage all went fine until asked if any late payments etc.. was honest and said yes 1 late payment last June on cc, was on holiday for 3 weeks and was only paid when I got back - (I think the payment was 4 days late in the end) Stupid I know to forget but I am only human and cannot change the past so hay ho! He then proceeded to run the credit check and confirmed what I told him

Mortgage guy said everything was fine apart from that but because that was on my file he couldn't approve the application there and then but would have to defer it to an underwriter to review.

He also said if I had an extra 5% deposit this would not be an issue.

So I'm fearing the worst now, and just wanted some advice that if they come back and do indeed reject my application, is it now a case that other lenders will see that and also reject me (pretty sure a rejected mortgage offer does not improve how I am seen by other lenders!)

Is it impossible for me to get a 90% LTV from any lender? 15% is not really an option right now, Also as a FTB I feel embarrassed, if the worst happens and I have to go back and tell the EA and seller the deal is off :-(

I actually thought I would be seen as fairly low risk in the broad scheme of things but reading these boards I see that is clearly not the case!

Live & Learn......

kingstreet

One late payment and that's it?

A non-credit scoring lender, like a smaller building society should be prepared to look at this.

Conrad

Always impossible to answer these questions because in the end each lender uses credit scoring software (nothing to do with Equifax et al), which renders a cocktail of factors and spits out a result. On top of this individual underwriters will need to take view.

My gut feel is you will get a 90% mortgage however. Britannia is one of those fussy little Building Societies so I can't say how it will go with them. Waiting game I guess.

Edit - as King says, a non credit scoring BS might be able to help although they are fussy in other ways such as wanting to scrutinse 3 months Bank stats and often getting into immense detail about long forgotten mail order and what not.

Good luck

__Az__

Thanks for the quick replies

What would be my next move if I am indeed declined? (should find out latest Monday)

Should I approach a broker and try and find another lender or look for one of these smaller BS that does not use credit scoring? How do you tell who these are?

Or having been declined do I have to wait x months before approaching other lenders in which cause I miss out on the home I have had an offer accepted on?

Sorry for all the questions - really appreciate the help!

kingstreet

I'd consult a broker if declined.

Only the search is recorded, not a decline, so you have no period to wait until you can apply elsewhere. Just be careful not to run up and down the high street having speculative searches done willy-nilly, as too many of them can damage your chances.

__Az__

Thank you, still not heard anything from the lender....I'm not taking the silence as a good sign lol - I will contact some brokers if on Monday they have declined my application. (guy said he would call today or very latest Monday)

A few more questions - Are there any brokers that specialise in getting 90% mortgages? I did approach one before going direct who seemed reluctant at best because I "only had 10%

Yes I know its not much (if you call 20k not much money :-) ) but didn't find his comment that "20% would be much better" useful. I'm sure 50% or even 100% would be "more useful" as well but it isn't happening! lol

Is there anyway to negotiate with the lender or am I being naive here and once "computer says no" thats it?

Reason I ask is - I could go to 11% deposit if that helped in anyway, not even sure if this is possible as their packages were 10, 15, 20 % upwards.

I could agree to overpay the 1st year to decrease Loan? i'm more than comfortable with the repayments and they are considerably less when compared to what I have been saving combined with rent each month for the last year

The property needs some updating, It is priced to reflect this when compared to the other houses on the road (i'm a bit of an expert on the house prices round here as I used to live in the same street) Its also in an area of the south east that does not get hit when house prices drop.

Carpets kitchen, bathroom could do with updating. If I carried this work out within x months then surely the subsequent increase in the value of the property will have decreased my LTV to the magic 15%?

Like I said probably showing how green I am when it comes to all this - just cant believe there is not a deal to be done here, and want to explore all options, otherwise its give up and come back next year... :-(