Turned down for Remortgage - what now?

Thrugelmir

xcountry23 wrote: »

but was turned down at the last minute because she'd used her overdraft too much over the previous few months (never went over her OD limit though).

Why?

A lack of savings to cover emergency expenditure?

System

Thrugelmir wrote: »

Why?

A lack of savings to cover emergency expenditure?

Paying off remaining balance of student loan and paying off c.£1,000 that had sat on a credit card for a year or so. These weren't essential payments as she could have continued paying off the SL in instalments and left the balance on the credit card - and presumably obtained the mortgage deal that Tesco had agreed to in principle.

She doesn't have additional savings to cover emergency expenditure, but I suspect that would apply to the vast majority of mortgage applicants!

System

Note: Deposit was £65k, with a mortgage of £147k (purchase price £212k).

Current interest rate (I think) is 3.99%. Monthly payments have gone up from £660 to £740.

Thanks

Thrugelmir

xcountry23 wrote: »

She doesn't have additional savings to cover emergency expenditure, but I suspect that would apply to the vast majority of mortgage applicants!

Personal management of finance greatly impacts ability to switch lenders now. All one can do is tackle ones own issues.

System

That's somewhat oblique...

Do lenders ask for additional savings now? Wouldn't it be better to put this towards a deposit?

Thanks

TMSL

This is a classic situation where a client should have sought the help of a broker straight away rather than trying to do it themselves and making the situation harder. Unfortunately its something I see all the time clients quoting Tesco, First Direct, HSBC, Yorkshire rates and more often that not being turned down for spurious reasons.

System

TMSL wrote: »

This is a classic situation where a client should have sought the help of a broker straight away rather than trying to do it themselves and making the situation harder.

Have things changed recently? 2 years ago it was just a case of phone bank, get offer in principle, fill in forms, get mortgage.

The only changes to her circumstances (other than peanuts moving from SL/credit card to overdraft - since paid off) are modestly increased income and reduced outgoings.

Out of interest, what ballpark figure would a broker charge? Presumably this would be in addition to mortgage provider's fees? (I appreciate there are other benefits to using a broker).

Thanks

Thrugelmir

xcountry23 wrote: »

Have things changed recently? 2 years ago it was just a case of phone bank, get offer in principle, fill in forms, get mortgage.

Been a progressive change since 2007.

In past 12 months a more noticable acceleration. As banks (under new management) pre-empted FSA involvement in the sector.