Please FA's and Mortgage advisors I need your HELP!!

liddyj

Hi,



I’m really really deflated due to some news we got about ourmortgage application today. Myself andmy partner thought we were in a great position to apply for a mortgage but itappears this is far from the truth. Ok, so this is our story. We both boughtproperties in the height of the market (2005) both are 2 bed terraces inManchester. Neither of us has really made anything on either of them hence whywe are renting them out. He moved in with me as mine was more homely and he’shas been rented out for a year to tenants. We will rent mine out and the planis to buy a 3rd house to live in. We both have reasonably well paid jobs. He ison 42k basic and I’m on 28k. we have no loans credit cards or big debts. I havea credit score of 999 and he has a score of 946. We have found a property thatis 180k and we have really strained ourselves to save 18k (10%) deposit. Mycredit file is squeaky clean however despite being in good and having a goodscore my partner has 3 missed payments in the last year 2 of which are hismortgage (it was only one late payment but is was secured and unsecured loan soit counts as 2) He also had a dispute with orange just short of 3 years ago andout of stubbornness didn’t pay his bill completely unaware what a credit scorewas at that point. That’s settled now too. We applied for a 90% LTV fixed ratefor 2 years and it was declined. no reason just straight decline. I wassobbing. I just couldn’t understand what the problem was and I find it SO SOunfair that companies can run a search on you, cripple your credit score thenwalk away without giving you and explanation. The mortgage payment late paymentis just about to fall out of the "within the last 12 month “bracket aswhen he makes next month’s payment it the yellow 1 will drop off the end. Thiswill mean as a snapshot where is says number of missed payments in the lastyear will go from 2 to 0. I can live with it being that as hopefully when itfalls out of the 12 month bracket hopefully we can try again. I just wonderedif it was a straight decline for missed mortgage payments within a year becauseif it’s not that I don’t know what to do?? I just wish they had the decency totell us what it was? are they not regulated or can be made to tell you what theproblem is so you can at least try to fix it? Im desperate to know what we needto do to make it right and is it an unwritten rule that nobody with a mortgagemissed payment in the last 12 months would get a mortgage because of that? Is it worth waiting till it drops off or arewe doomed forever not knowing why? Please help!!!??/

ACG

It sounds like its been declined on credit score. But they do not have to give you a reason.

Being over 12 months old does not mean they will accept you. With a 10% deposit this could be pretty difficult to place to be honest. A default and a missed payment(s) on a mortgage does not look good. A missed payment on a credit card is not as bad as a mortgage.

I think you should get all 3 credit reports (experian, equifax and call credit). Then sit down with a broker, there might be options, there might not be but i wouldnt be making applications randomly without having someone experienced look at the options, you can at least then come up with a plan of action together on how to proceed.

I would also try and save towards a 15% deposit (if possible) as that may open you up to more lenders and more lenient underwriting.

liddyj

This is another thing, there are 3 credit companies, We are with credit expert (experian) NRAM mad a mistake on his mortgage payments and gave him a late score 6 months ago. We have fought for 6 months for them to just pass the info on to credit expert. It was finally removed with just leaves the one at the end. But does that mean it will still remain on the other 2 companies?? I fell like breaking down, you cant win? what on earth are we supposed to do?/ We have exhausted every means to get that 18k. How can we ever get out of this mess?? Thanks so much for your advice.

liddyj

You say there might be option you also say there might not? are you really saying that a couple who earn 70k combined with no debts can never get a mortgage for 162k? surely not?? god Im on 999 and he is on 946? in terms of scores? what do they want? blood? I know loads of people who earn no where near as much as us and I know have missed payments got mortgages. Ive just been on the abbey criteria ans it states in black and white "missed payments in the last 12 months-not acceptable but on most of the other lenders it says - refer to lender. does that mean maybe others would of maybe let us through but we just chose the wrong lender?

ACG

If they have removed it from one, get your other reports... if theyre still on there call them up speak to a manager and say you want it updated within 7 days otherwise your going to complain to the ombudsman.

Its not worth getting upset about as they will have to update it, as it sounds like they are admitting fault.

If you cant get to 15% then its going to be very difficult. Who declined the application?

Get your reports to a broker, there might be ways to play the system to your advantage depending on those reports. If theyre all showing the missed payment and default then your going to struggle without getting to 15% but i think getting your reports to a broker should be your next port of call.

(Dont use an estate agency broker)

grifferz

liddyj wrote: »

This is another thing, there are 3 credit companies, We are with credit expert (experian)

You aren't with them, other companies use one of them to check you. So you have to check all three I'm afraid.

If you can't make any savings whatsoever then if you think about it, buying a third property is really quite risky for you isn't it? How will you pay for needed work on your two rental properties plus any incidental work required on your own home?

I'm not trying to be a downer but what happens if the boiler in one of your rented properties dies? You'll need to replace it right away or else lose the tenant, can you cope with that without missing any mortgage payments on all three properties? Does a tenancy void put you in risk of missing mortgage payments? Are you risking one default knocking on to others and you losing the lot?

If you can make a bit more savings then that reassures the lender that this scenario is less likely.

ACG

Just seen your post - forget the 999 score, it means nothing... if i gave you a score it would mean just as much as that score. Lenders use their own scoring systems.

Also, i know it sounds harsh but forget what other people have done. They might have a bigger deposit, they might have applied when criteria wasnt as strict they might not be telling you the full story.

The more recent the missed payments the more of a problem they will be. The reason im saying there may or may not be options is it all depends on the overall picture and there isnt enough info on here to give a definitive.

Im not saying you can never get a mortgage, but with a 10% deposit your at the higher end of the scale where lenders are stricter and they would prefer to see a perfect credit report.

Also at 90% some lenders would not like to see 1 or 2 properties in the background, others wont mind but i think this is a job for a broker unless your prepared to put in a lot of research.

liddyj

aw all this advice is great thank you. In relation to savings we have only been saving for 8 months and have managed to get 18k. I have a small business along side my full time job but becuse Ive not got 2 years accounts it doesnt count but I dont think this is my problem here. we literally have no outgoings other than mortgage and my car (hes is a company one) we bring in close to 6k per month and our outgoings EVEN IF we had no tennants in EITHER property would be less than £1600 and thats with the 3rd mortgage, This is why im frustraited cause the affordability isnt an issue AT ALL. even the stupis missed mortgage payment wa sbecuse my very clueless fella thought it was ok to just pay manually every month with his card 9I changed that to DD) Im annoyed at the credit score being worthless as we have been focussing on it being in the 999 bracket non the wiser that thats nothing to do with it. I think we will just have to save up more. Im jusy hoping this is the difference as if we do and we still get declines I give up completely.

liddyj

ps it was with the Abbey. Why do you ask?

liddyj

ACG wrote: »

If they have removed it from one, get your other reports... if theyre still on there call them up speak to a manager and say you want it updated within 7 days otherwise your going to complain to the ombudsman.

Its not worth getting upset about as they will have to update it, as it sounds like they are admitting fault.

If you cant get to 15% then its going to be very difficult. Who declined the application?

Get your reports to a broker, there might be ways to play the system to your advantage depending on those reports. If theyre all showing the missed payment and default then your going to struggle without getting to 15% but i think getting your reports to a broker should be your next port of call.

(Dont use an estate agency broker)

it was with the abbey why do you ask/

ACG

Because lenders have different criteria and allowances, they also search different credit agencies.
Applying to Abbey might not be the best option (Im not saying whether it is or not as there isnt enough info).

I know i have said this a few times but i really do think a broker is the way forward on this. Every time you make an application it has an effect on your credit report. You could do with getting the right lender first time to avoid too many searches on your credit report as it will not have a great affect on the score.