Declined by Halifax

heidbanger

I currently rent my house from a company which is owned by a relative, I have however been made an offer by the company to buy the house at somewhere between 70 & 80% of current value (still to finalise exact figures) I have only just got my record clean again after a rather messy split a few years back and would jump at this chance of I could get a mortgage. The downside is I have no deposit given this was sprung on me and would look for the difference in purchase price to value as the input.

I would be looking at a mortgage of around £90k and I have current borrowings of around £12k most of which is a car loan which I only recently took out (if only!), my salary is £34k and my partners is £21k though we may have to go on me alone as she has had some late payments over the past three years, I'm all green with three credit cards and a credit union loan which has a couple of hundred left.

We had spoken to a broker recommended by the company but when she tried Halifax today it didn't get past the first stage and I bank with them.

Do you think this could work?

Many thanks in advance.

kinh

heidbanger wrote: »

I currently rent my house from a company which is owned by a relative, I have however been made an offer by the company to buy the house at somewhere between 70 & 80% of current value (still to finalise exact figures) I have only just got my record clean again after a rather messy split a few years back and would jump at this chance of I could get a mortgage. The downside is I have no deposit given this was sprung on me and would look for the difference in purchase price to value as the input.

I would be looking at a mortgage of around £90k and I have current borrowings of around £12k most of which is a car loan which I only recently took out (if only!), my salary is £34k and my partners is £21k though we may have to go on me alone as she has had some late payments over the past three years, I'm all green with three credit cards and a credit union loan which has a couple of hundred left.

We had spoken to a broker recommended by the company but when she tried Halifax today it didn't get past the first stage and I bank with them.

Do you think this could work?

Many thanks in advance.

First of all best of luck! So you have recently taken out a car loan for 12k, plus some credit union loan, for few hundred, 13k, what is the limits on your credit cards and do they have low balances?

Say if you have a total combined debt of say 17k, (including available credit) your just past half of your salary the bank may think it would be a big risk to accept you with your current circumstances.

To get a better picture?

What is your total debt, including available credit for your credit cards?

Are you on the electrol roll at current address?

How many years at current employment

Any dependents?

Any adverse info on credit file, late payments, defaults, ccjs, how many credit searches?

Are you financially associated with your wife (this can bring you down when it comes to getting credit because she has slightly adverse credit history)

You say you had no deposit, so I am confused, what did you tell the broker?

heidbanger

kinh wrote: »

First of all best of luck! So you have recently taken out a car loan for 12k, plus some credit union loan, for few hundred, 13k, what is the limits on your credit cards and do they have low balances?

Say if you have a total combined debt of say 17k, (including available credit) your just past half of your salary the bank may think it would be a big risk to accept you with your current circumstances.

To get a better picture?

What is your total debt, including available credit for your credit cards?

Are you on the electrol roll at current address?

How many years at current employment

Any dependents?

Any adverse info on credit file, late payments, defaults, ccjs, how many credit searches?

Are you financially associated with your wife (this can bring you down when it comes to getting credit because she has slightly adverse credit history)

You say you had no deposit, so I am confused, what did you tell the broker?

Sorry for not being clear in my post, timing could have been better but it was completely out of the blue.

My total borrowings are £12k in total not £17k, the car loan is around £9k with the credit union being £200 or so and three credit cards with limit of £4k and owing around £2.5k (in total).

I am on the electoral roll the past three years and have been in this house for five years with four years in my present full time position. I have nothing adverse in terms of payments although probably double figures in searches in last six months in my quest to get a mainstream instead of Aqua/Vanquis cards.

I am not recorded as financially associated in any way with my partner.

I explained to the broker the situation as it was, the house is being offered to me at way under market value, they reckoned it could be done but I'm not so sure. Another note is any repayment mortgage up to around 5% will be cheaper than the rent I have paid for the past five years.

kinh

heidbanger wrote: »

Sorry for not being clear in my post, timing could have been better but it was completely out of the blue.

My total borrowings are £12k in total not £17k, the car loan is around £9k with the credit union being £200 or so and three credit cards with limit of £4k and owing around £2.5k (in total).

I am on the electoral roll the past three years and have been in this house for five years with four years in my present full time position. I have nothing adverse in terms of payments although probably double figures in searches in last six months in my quest to get a mainstream instead of Aqua/Vanquis cards.

I am not recorded as financially associated in any way with my partner.

I explained to the broker the situation as it was, the house is being offered to me at way under market value, they reckoned it could be done but I'm not so sure. Another note is any repayment mortgage up to around 5% will be cheaper than the rent I have paid for the past five years.

ahh ok got you, how many credit applications in the last twelve months is currently listed on your credit file?

So regarding deposit, the broker must of submitted your application for 100% LTV? I am no expert when it comes to mortgages but it seems like the broker has done this, this could of been the major factor in the decline. It would be best to go back to the broker and get them to get the exact deciding factor in the decline so you'll know what you can do to potentially get the same result the next time you apply.

best of luck!

catwoman73

Lack of deposit and high debt will count against you. Bad luck on the timing of the car loan - could you sell the car, pay off the loan, do without a car for a bit and save up for a cheaper one? Loans for expensive cars are one of the fastest ways to financial disaster IMHO.

Mortgages will be based on a % of the value or purchase price, whichever is lower - Try another bank/broker to see if there are any effectively 100% mortgages available - there are products where a relative puts up some savings which will be called upon if you don't pay the mortgage.

Otherwise, does the relative need to sell the house now? Could they wait a year while you save a 10% deposit? If they put it on the open market it could take this amount of time to sell anyway.

A £55k household income while renting a house worth £90k or so should make saving £1k per month easily achieveable with a few cutbacks - you will then have a bit extra for fees etc. Your mortgage will be much cheaper as well.

For the future, try and put some savings away, even if you don't have something in mind to spend the money on - a few hundred per month on your combined income should be easily affordable, and it means that you won't need to borrow for cars and household repairs - makes a massive difference to your financial happiness.

HTH and good luck!

heidbanger

catwoman73 wrote: »

Lack of deposit and high debt will count against you. Bad luck on the timing of the car loan - could you sell the car, pay off the loan, do without a car for a bit and save up for a cheaper one? Loans for expensive cars are one of the fastest ways to financial disaster IMHO.

Mortgages will be based on a % of the value or purchase price, whichever is lower - Try another bank/broker to see if there are any effectively 100% mortgages available - there are products where a relative puts up some savings which will be called upon if you don't pay the mortgage.

Otherwise, does the relative need to sell the house now? Could they wait a year while you save a 10% deposit? If they put it on the open market it could take this amount of time to sell anyway.

A £55k household income while renting a house worth £90k or so should make saving £1k per month easily achieveable with a few cutbacks - you will then have a bit extra for fees etc. Your mortgage will be much cheaper as well.

For the future, try and put some savings away, even if you don't have something in mind to spend the money on - a few hundred per month on your combined income should be easily affordable, and it means that you won't need to borrow for cars and household repairs - makes a massive difference to your financial happiness.

HTH and good luck!

Thanks CW, the plan was to buy in a couple of years but they are wanting to offload now and it really was out of the blue hence the lack of planning on our part.

shaundiamonds

Try the Halifax concessionary mortgage - they are the only lender that does it. You use the % of value from the discount on the property if you already live in it and it is offered to you by the current owner. Therefore your deposit would be much further past 30% and you may be more likely to pass. Not all declines are based on credit history, there is a weighting formula that pretty complex and deposit (value to lender) is key. I recently completed on a concessionary mortgage - thank me later