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Struggling to remortgage

goaroundnow
goaroundnow Posts: 95 Forumite
edited 4 March 2013 at 2:00PM in Mortgages & endowments
Hi Guys

I hope you can provide some advice.

My excellent mortgage broker is struggling to secure me a remortgage.

The property in question is a flat in a city centre near and indirectly over commercial premises. This means that some lenders (e.g. my "bank" Nationwide) won't lend on it.

The ones that will are struggling with my credit report.

Details:

I have no late payments, defaults, CCJs etc.
I have seen reports from all 3 CRAs.
My credit cards (total available credit: £12000) have zero balances
I am not using overdrafts
I do have a loan with an £8600 balance outstanding, £230pcm
I have an (expensive!) car on finance showing as £49000, £760pcm. Don't judge (!) - this is my treat to myself and as I have no kids or ever likely to, this is where I choose to spend my money.

The remortgage is at 73%LTV and I am currently with Halifax.

The problem seems to be that although I fit affordability (taking into account the above commitments), the large car loan decimates my credit score due to debt-to-income ratios. One lender confirmed that (and I quote) "this is what is dragging the score down." Nothing else. One lender has said that mine is a case which they should approve as it is clear that the mortgage is affordable, credit history is good etc but as the score is low, even the u/w has no authority to overturn it.

My point/question is that it seems ridiculous that affordability calculators allow the application to proceed but then those very same declared commitments kill your score. If there were any adverse entries or similar, I could understand the nerves from lenders.

Is there any way round this?
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Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The problem seems to be that although I fit affordability (taking into account the above commitments), the large car loan decimates my credit score due to debt-to-income ratios. One lender confirmed that (and I quote) "this is what is dragging the score down." Nothing else. One lender has said that mine is a case which they should approve as it is clear that the mortgage is affordable, credit history is good etc but as the score is low, even the u/w has no authority to overturn it.

    Suggest these are personal views and opinions rather than those of underwriters. Affordability is a subjective issue. Underwriters may well use a what if scenario, i.e. if interest rates were to rise by 2%. Also you have a committments that cannot be changed.

    Difficult to pass any other comments. As would need far information.
  • kingstreet
    kingstreet Posts: 39,335 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    You have credit commitments which total £12,000pa.

    Provided your gross annual income after that is enough to justify a mortgage of between three and four times income, I'd be surprised if there was no-one willing to look at it.

    My usual suggestion for such cases is to look at smaller, non-scoring building societies.

    What is the purpose of the remortgage? Have these lender enquiries resulted in credit searches being done@ If so, don't have any more for fear of damaging your credit file further.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • goaroundnow
    goaroundnow Posts: 95 Forumite
    Thanks

    Only one search has been performed but, strangely, didn't show on my credit report from Experian. This is despite the lender confirming which CRA they used (Experian) and stating to my broker the commitments which had been picked up. Anyway, I view that as a bonus.

    I earn £60k per year and want to borrow £144k.

    Purpose is that fixed-rate (3.8%) is about to go to SVR (4%) and I believe at 75% LTV level, I should be able to secure a rate nearer 3%.

    The comments about what was "dragging the score down" were made by a relationship manager who, apparently, was looking at my case and could, seemingly, provide some insight not what was affecting the score.
  • kingstreet
    kingstreet Posts: 39,335 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Was the search by Halifax?

    If so, it's a soft search, which leaves no visible record as it is not a full search. This is left until full application.

    With £48k left after the credit commitments and a multiple of only three times income needed, I still think a smaller building society would be a good bet, as they may not credit score and will look at your application on its merits as a whole.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • goaroundnow
    goaroundnow Posts: 95 Forumite
    Thanks KingStreet

    No, the search-that-never-was was Abbey.

    I am currently with Halifax

    Problem with smaller BSs is that they seem to have policies regarding flats near/over commercial premises.
  • kingstreet
    kingstreet Posts: 39,335 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Nothing else I can think of, sorry.

    See if any of the others have an idea.

    Have you looked at the Halifax product transfer options? Nothing they offering take your eye?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • goaroundnow
    goaroundnow Posts: 95 Forumite
    Product transfer of 3.29% which isn't bad.

    There do seem to be 2.8% rates out there, though.

    If all else fails, 3.29% will do.

    Thanks for your advice
  • Experian_company_representative
    Experian_company_representative Posts: 2,134 Organisation Representative
    Part of the Furniture Combo Breaker
    If you order a copy of your Experian credit report it will include all search footprints over the past 12 months. Only the 'credit application' ones show to lenders.

    James Jones
    Official Company Representative
    I am an official company representative of Experian. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"

    Posts by James Jones, Neil Stone, Stuart Storey & Joe Standen
  • goaroundnow
    goaroundnow Posts: 95 Forumite
    I did order it and the footprint was definitely not on there - in any form whatsoever.
  • kingstreet
    kingstreet Posts: 39,335 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    In the last couple of days there was another Abbey/Santander where an AIP was carried out but no search has been recorded on the applicant's Experian record.

    See "smacky's" thread.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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