Declined for mortgage, next step?

Sarahfie

We applied for a mortgage with Natwest around 3 weeks ago, (first time buyers, 90% mortgage)

Our broker today informed us that we have been declined for the mortgage, due to my bank account being 36p overdrawn for a day due to a direct debit, even though I rectified this the next day by putting £150 in the account. (Showed up on bank statements, credit file clear and good)

Also on the basis that as we are first time buyers there is no outgoings on bank statements showing rental payments etc.

We have been advised to try another lender who don't look at bank statements, do you think this is the way forward (we don't want to be declined by them also) or appeal their decision explaining the reason for being overdrawn (have been advised this would take too long)

bigadaj

If you have a broker then they should be sorting this out, it's what you're paying them for after all. Push them for suggestions and then maybe come back and post on here for some independent opinions.

Thrugelmir

Sarahfie wrote: »

Our broker today informed us that we have been declined for the mortgage, due to my bank account being 36p overdrawn for a day due to a direct debit, even though I rectified this the next day by putting £150 in the account. (Showed up on bank statements, credit file clear and good)

Sounds flimsy as an excuse. Applications often fail on a number of issues which result in the applicant not passing the lenders criteria.

Obvious suggestion is to continue to save and build a larger deposit.

Swoosh84

Really, 36p over and that caused a decline? Our overdraft was £602.00 for about a week at one point and our app went through fine. So I would be surprised if this has anything to do with it.

It may be that you have no rent to pay. But I would assume if you have been regularly paying into a savings account this would have the same affect.

kingstreet

NatWest does not like bad account conduct, however trivial you may think that is. As a clearing bank, it has always been a bit like that. It automatically declines anyone with a history of payday loans too, probably for the same reason - risk.

There are plenty of lenders who will not be too concerned about this, provided that is all. If there are other unpaids and unauthorised borrowing charges, they will be picked up and then become a problem.

Moonraker71

OK, this has just freaked me out. I'm just about to apply for a mortgage with Natwest in about *one hour*, and I have dipped into my (agreed) overdraft of £250 about 5 times in the last year, though never for more than 48 hours. (One of those times was in the last three months.)

Sometimes I've gone over by as little as £4, sometimes as much as £190, but always paid in more funds the next day.

I have two current accounts - my self-employed income is paid into my Barclays account and then I pay myself a 'salary' into my NatWest account for day-to-day spending and direct debits. Which one will they base their decision on? I haven't ever gone overdrawn on the Barclays one.

I'm applying for a 60% LTV mortgage (moving home, never had any arrears with current mortgage) as a sole applicant with no other debts and no dependents if this makes any difference. Applying for £160k mortgage, the max they will lend me is £164k so pretty tight. Any thoughts? I know I shouldn't have gone overdrawn, I just didn't realise it mattered that much.

One other thing - they have just written to me unsolicited last week to extend the credit on my NatWest credit card for the "exemplary way I conduct my account" - but I assume this is something completely different?

Apologies for hijacking this thread, and good luck to the OP, it sounds ridiculously harsh.

somethingcorporate

If you are going into an agreed overdraft it is likely to be ok.

Whilst the OP is not specific I am guessing they went into an unauthorised OD, which caused the blip.

pjread

Moonraker71 wrote: »

I'm applying for a 60% LTV mortgage

60% and 90% mortgages are different beasts anyway. I suspect you'll be fine with almost anything that's not "obviously worrying".

reapz69

Sarahfie wrote: »

We applied for a mortgage with Natwest around 3 weeks ago, (first time buyers, 90% mortgage)

Our broker today informed us that we have been declined for the mortgage, due to my bank account being 36p overdrawn for a day due to a direct debit, even though I rectified this the next day by putting £150 in the account. (Showed up on bank statements, credit file clear and good)

Also on the basis that as we are first time buyers there is no outgoings on bank statements showing rental payments etc.

We have been advised to try another lender who don't look at bank statements, do you think this is the way forward (we don't want to be declined by them also) or appeal their decision explaining the reason for being overdrawn (have been advised this would take too long)

how far did your app get? did they do a survey or did it get declined on full app?

Sarahfie

Sorry I haven't replied sooner, had problems logging in and trying to sort out a new mortgage, the 36p was due to my bank switching my direct debit transfers from my old bank and I didn't know it had been transfered yet so the direct debit was unexpected however I corrected it the next day as soon as I realised,

The full application had been sent over two weeks ago, with all paperwork provided the same day, no valuation was carried out (so no money lost) it is just the fact it took 2 weeks to be told it was a no. I had passed the credit check and the 36p overdrawn isn't mentioned on my credit file as each month for that account is ticked as being ok.

We have now applied with a different bank (no bank statements requested) and the valuation is being carried out over the next 24 hours, with answer being expected over the next couple of days, although I am worried about the outcome as I am self employed so don't want this to be a different problem.

Thrugelmir

Sarahfie wrote: »

I am self employed so don't want this to be a different problem.

This will having a material bearing on your mortgage application.