trying to get a loan for home improvements

date542

Hi all---first post so go easy!

My partner and I have had a joint mortgage & current account with Santander--house is valued approx £160k--£75k left to pay on mortgage---she works full time and I am self employed for last 3 years with business doing really well.
We applied for a loan from Santander £22k for some home improvements (new kitchen)--prior to applying we checked my credit history on Experian came back as excellent--my partners was patchy--I cashed in a personal ISA and gave her £7k to clear most of her debts to a manageable level--we then applied to Santander who rejected but sent it to appeal but after 3 weeks it remained rejected.
This left us feeling angry--we decided to leave the mortgage with SAntander as currently nobody can offer a comparable rate--but decided to move the joint current account to Lloyds as we both have seperate personal accounts there and have done for nearly 30 years plus I have my business account there--we set up a meeting at the bank to do this and also with a view of exploring borrowing for the home improvements--to our horror our application for joint account was rejected!

This has left us feeling confused and angry--does anyone have any advice to offer--I have got a horrible feeling my credit score has been shot to hell--god knows why?

opinions4u

prior to applying we checked my credit history on Experian came back as excellent--my partners was patchy

So you're blaming Santander for your partner's money management.

Ignore the words excellent and patchy. What does the report tell you? What are the late payments, missed payments and defaults here? Are there any CCJs?

I cashed in a personal ISA and gave her £7k to clear most of her debts to a manageable level

So by implication these debts were unmanageable.

Can you understand why a lender wouldn't want to give you an extra £22k?

This has left us feeling confused and angry--does anyone have any advice to offer--I have got a horrible feeling my credit score has been shot to hell--god knows why?

You have a financial relationship with your partner. Your partner's "patchy" credit history is almost certainly the problem.

Hi all---first post so go easy!

I've tried to answer as I see the situation. On the face of it you're a good risk and you're partner isn't. Jointly? Lowest common denominator applies.

Apples2

Nobody has a given right to credit, especially those with a "patchy" credit file.

Stomping away from the first rejection by Santander into Lloyds wouldn't have helped matters, lenders do like to see stability, not a history of chopping and changing.

£22k is a sizeable sum for a kitchen, especially for those with a sketchy credit file. Take a good look at your credit files, that's where the answer is.

date542

Thanks for the response.
What you have to understand is that I have never had any credit cards and we have had the mortgage for 6 years and never missed a payment--santander were quite happy to give us a mortgage for £90k--purchase price was £170k--we lumped £80k down as deposit from sale of previous house--plus at time of purchase we were offered £25k for home improvements--my partners credit history was pretty much the same at the time and I was only on £25k a year at the time--my situation has greatly improved since going self employed---now can you see why I am aggrieved?

Call me naive but I always thought the fact that we had collateral (the house)--relatively small amount of £22k would be no problem--I believe the banks are working to a hidden agenda and are quite happy to sit on the cash. In our own small way we could have kick started the local economy--by hiring kitchen fitters, designers, plumbers, electricians, suppliers etc. The banks seem happy to stifle all this

Are there any other options to explore?

CLAPTON

what do your respective credit files actually show
-electoral roll
-credit
-missed payments
etc


what are your respective incomes

Apples2

The is a huge difference between secured and unsecured borrowing.

You had an attractive LTV due to your large deposit so the risk was low enough for them to offer an additional £25k. I'm assuming that was to go secured on the house too.

Risk is high for the self employed, even those with regular employment should expect to be earning at least £45k with no other debts at all and a perfect credit file before being accepted for £22k.

inmypocketnottheirs

Cash? In today's market £22k on a kitchen is a big spend. Will you be adding that much to the value?

In my opinion getting rejected is a good thing. Rethink your budget, tailor the job to a smaller scale and I reckon you will be a lot better off.

What repayments were you looking at for £22k?

meer53

6 years ago, things were very different. Loans are much more difficult to obtain now as all banks and financial institutions have tightened up their criteria.

You cleared your partners debts to a "manageable" level which indicates there are still debts outstanding ? You are financially linked to your partner which is what Santander will have looked at when making their decision. You were asking for an unsecured loan so the fact that you have equity in your house wouldn't come into play. Why didn't you add it to your mortgage ? You might have had more chance of success that way.

date542

She is on £28k a year and I pull in £3-5K per month--my score on Experian was 980 (excellent)---after she cleared some debts prior to applying for this loan hers shot up to 920 (excellent)--she has missed some monthly commitments in last 2 years on one card but always doubled up the following month--is Experian worth the paper its writte on?? or--as I said earlier--are the banks working to some form of agenda---though not the end of the world I have taken this personally and see it as a kick in the teeth---the final preferred option would be to cut out the banks altogether and save though this would take a couple of years and we had planned to make the improvements this year. I now resent the fact that I use the banks for my business and personal accounts and pay my hard earned cash into their organisation but when we go to them with the begging bowl we are treated like 3rd class citizens

Apples2

Credit scores are meaningless, completely meaningless. Forget that silly made up number.

Your wife has a relatively low salary and a history of missed payments, doubling up the following month is far too late. These missed payments will have a negative effect for 6 years and will exclude you from sensible borrowing for a long time yet.

Start saving, if you can save that in 2 years, that would still be quicker than it would take for your loan application to be successful

date542

Just to clarify--the application to Santander WAS a secured loan--the £22k was not just for a kitchen--other home improvements included too