Nationwide Mortgage DIP referred to underwriter - Chance of Success?

gelmc

Hi there money saving peeps,

I'm hoping for some advice about my referred DIP (decision in principle) with Nationwide. I bank with them, have a Save to Buy account and have just opened a new ISA.

I applied for a DIP today and it came back referred. The advisor said that there was a slim chance of me getting a green light as the they are doing everything by the book and the FSA or equivalent are on their back a lot, but an underwriter would look at it and make a decision. He said it would take 1/2 days and they'd send me a letter about it, but I have the sense that I'll be waiting longer.

A little bit about my current financial circumstances:-
Offer accepted on a house for £109000
Have a 10% deposit, all savings
Am a first time buyer
Earn £35447 a year (other lenders have said they'd lend me more)
Have a credit card for £200 I pay off every month
Have a £253 car loan I pay every month
I have an overdraft of £1550 (I often get charged for going over the limit - my only bad financial move I can think of):(

Any advice on this subject (or similar experiences) would be gratefully appreciated! I'm not sure what to do next as I don't want to instruct my solicitors until I've got a mortgage offer approved.

The good thing is that the vendors are willing to aim for completion in 3 months time.

Help please !

Thrugelmir

Why the overdraft usage if you have savings?

gelmc

A hangover from student days. Not had it that long mind.

x.sophie.x

Hi Gelmc,

I take it you applied in branch with one of their mortgage advisors? Did they give you any indication as to why it was automatically referred?

My boyfriend and I went into NW on Tues to get a DIP on a save to buy mortgage with 10% deposit. Ours was also automatically referred. Our advisor went off straight away to call headoffice to find out why this happened - as we are well within affordability (£160k house/£250k potential loan), and both have excellent credit histories. Within 5 minutes she came back and said that as we currently live in a flat our address doesn't tie up with the EXACT address recorded on the electrol register.

We've had to provide council tax letters/wage slips/bank statements and passports in advance for the underwriters, but she has assured us that she often sees this issue with flats, and it's nothing to worry about. We still are awaiting a decision, as the underwriters are looking at the documents we have provided. We saw her again today (to give her some of the aforementioned documents), and she believes we should have a (positive) decision tomorrow, with aim of getting a valuation sorted mid next week. Apparently by providing all this information up front will just mean we won't have to do it later on during the full application. Plus it will also mean that most potential issues will have been resolved up front (we'll see about that - but I'm trying to be optimistic ...

Don't think this is the normal way of doing things, but as our advisor has reassured us of the reasons for all the additional documentation at this point, I don't feel very worried (maybe I should be - who knows). Maybe your advisor is less experienced, and haven't seen this issue before?

If I were you I'd try and find out the reason for the referral, as our advisor was able to let us know straight away. If it truly doesn't look good, I would contact an independent broker - they should be able to guide you better.

Sophie

x.sophie.x

Just an update with my situation - we have had our DIP accepted and solicitors / valuation has been instructed.

gelmc

Thanks for your advice x.sophie.x.

Becasue you'd had an immediate answer as to why you'd been referred, I got onto it early this morning and emailed my advisor. I also rang the call centre and got through to the admin section of the underwriters' office. They said that I had failed on the credit score!???! Which is bizarre as everything in my credit record is green. I haven't missed any payments for anything for years.

I spoke to a couple of girls at work who are applying for mortgages like me. One of them had been rejected by Nationwide and she only had 5% deposit and was buying by herself like me.

I have come to the conclusion that they want borrowers who are couples and who have well over the 10/5% deposit. I've read elsewhere that they can be quite stingy and strict with their decisions - the advisor and admin staff I spoke to so much as admitted that.

Anyway my mortgage hunt goes on. Fingers crossed I get it sorted soon!

x.sophie.x

Hi Gelmc,

So does this mean that NW have declined you then, or is it still with the underwriters?

I don't know if this is an option for you, but it might be worth looking at Lloyds Lend a Hand scheme. This allows you to put down 5% deposit, and the council guarantees 20% of the deposit - so you effectively get rates for a 75% mortgage. http://www.lloydstsb.com/mortgages/offers/local-lend-a-hand.asp

My boyfriend and I were going to go with that originally, but the house we found was over the £150k cap that Lloyds will lend up to. You will have to make sure that your council is also participating in the scheme. I told one of the girls I work with about this mortgage a couple of months ago, and she's just been accepted. She's buying a house for 120k on her own...

Thrugelmir

gelmc wrote: »

They said that I had failed on the credit score!???! Which is bizarre as everything in my credit record is green.

Pay off the overdraft with your savings. On high LTV mortgages lenders look closely at other debts and the manner in which you handle your personal finances.

Ignore your Credit Agency score. Lenders score applicants themselves.

kingstreet

Credit score does not mean credit check.

It means the lender views your overall case as too high risk.

For example, multiple jobs, multiple addresses in the last three years, small deposit high credit usage all contributory factors.