Mortgage turned down over £2500

opinions4u

martinsurrey wrote: »

if as a vendor someone said, "I offered more than I can afford, sell it to me for what I can get."

I would laugh and have the property back on the market faster than the OP can say "income multiples"

Tough then, isn't it?

Of course a lower offer can be made, citing anything you like. A white lie from the valuation report would do the job.

Either way, it's not the lender's job to lend more than they feel is reasonable.

Colin297

Thrugelmir wrote: »

If you cannot afford the additional £2.5k yourselves. Then you are stretching too far.

Pretty much, this.

My advice is take the offer by whatever means necessary.

If 24750 is their absolute final offer then it is what it is. I'm sure you've negotiated deals before where that extra £10er makes it "too expensive". Same principle here, really.

dunstonh

martinsurrey wrote: »

if as a vendor someone said, "I offered more than I can afford, sell it to me for what I can get."

I would laugh and have the property back on the market faster than the OP can say "income multiples"

But another vendor may be in a chain and could lose their house if you pulled out and would make that change.

johns4012

ok but here's how i see it

I'm putting down a huge deposit so there is a real vested commitment to make sure i keep up with the repayments as i dont want to loose the house and the deposit if i defaulted.

I have worked out my own finances like i have done for the last 20 years and we can comfortably afford the repayments for the full money lent so i'm not stretching myself to the limit of my finances. On top of this i have other guaranteed income coming into the household that the lender dismisses as they cant find the correct box to tick!

Where is the risk from the lender? in every worst case sernario the lender will more than cover their risk as there is so much equity in the property.

This to me feels like the banks not been in touch with the individual needs of their customers and herding us all through the system with very little leeway or thought!

_Andy_

1) it doesn't matter how you see it, it matters how the lender sees it.

2) As has been mentioned now several times, there has to be a cut off somewhere.

buzzyzoe

johns4012 wrote: »

ok but here's how i see it

I'm putting down a huge deposit so there is a real vested commitment to make sure i keep up with the repayments as i dont want to loose the house and the deposit if i defaulted.

I have worked out my own finances like i have done for the last 20 years and we can comfortably afford the repayments for the full money lent so i'm not stretching myself to the limit of my finances. On top of this i have other guaranteed income coming into the household that the lender dismisses as they cant find the correct box to tick!

Where is the risk from the lender? in every worst case sernario the lender will more than cover their risk as there is so much equity in the property.

This to me feels like the banks not been in touch with the individual needs of their customers and herding us all through the system with very little leeway or thought!

If you have other income, can't you use this to make up the 2.5K? If 2.5K is the difference between you being able to afford the house and not afford it, then you probably can't afford it anyway.

Will you literally be using every last penny and leaving yourselves with no savings? If yes, this is obviously a bad idea. If no, make up the 2.5K from current savings, or as others have said, negotiate the price down by this amount.

Goldiegirl

johns4012 wrote: »

Where is the risk from the lender? in every worst case sernario the lender will more than cover their risk as there is so much equity in the property.

Ok, lets just say that they suddenly turned round and said 'oh sod it, it's only £2500, we'll roll over and give you exactly what you want, John'

Then a few years down the line it all goes pear shaped, the interest rates go up, you're on short time work and you can no longer afford the payments and you lose your house.

Do you blame

A) yourself, for being over confident about what was affordable.

Or

The bank. 'Well they lent it to me, so its their fault, innit'

Very few people ever blame themselves - it's always the bank's fault. That's why the banks have to be responsible and cautious about their lending. They are not just being awkward, believe it or not they are being responsible, and trying to avoid a situation where you could end up with a repossession.

amnblog

If God didn't want us to point them, he wouldn't have given us fingers.

CapJ

johns4012 wrote: »

ok but here's how i see it

I'm putting down a huge deposit so there is a real vested commitment to make sure i keep up with the repayments as i dont want to loose the house and the deposit if i defaulted.

I have worked out my own finances like i have done for the last 20 years and we can comfortably afford the repayments for the full money lent so i'm not stretching myself to the limit of my finances. On top of this i have other guaranteed income coming into the household that the lender dismisses as they cant find the correct box to tick!

Where is the risk from the lender? in every worst case sernario the lender will more than cover their risk as there is so much equity in the property.

This to me feels like the banks not been in touch with the individual needs of their customers and herding us all through the system with very little leeway or thought!

I understand where you are coming from. We are used to thinking of borderline cases being referred to an underwriter (though a bank is not obliged and indeed does not do this in all borderline scenarios).

But Mortgages and banks generally are heavily regulated these days. A bank needs to look at "credit risk" but it needs to also look at "conduct risk" (like affordability - even if there is no risk to the bank).

Imagine they lent you the extra money and then the FCA (regulator) comes along and says "hang on you lent this guy too much money. You are OK because of the deposit, but if he can't repay then he loses his home. And according to your own criteria he can´t repay."
Do you think an acceptable response by the lender would be "well it is only 2500 GBP?" It wouldn´t be in my book, nor in most people´s book. That is why it is harder to have underwriters make judgement calls on borderline affordability cases.

BTW unsecured debt is usually more heavily penalised in an affordability calculation (because it is usually a higher monthly payment due to higher interest and shorter term) so I would not advise funding the different with unsecured debt - you would end up chasing your own tail.

opinions4u

johns4012 wrote: »

I'm putting down a huge deposit so there is a real vested commitment to make sure i keep up with the repayments as i dont want to loose the house and the deposit if i defaulted.

Their underwriting criteria will almost certainly make allowance for your big deposit. You want them to make further allowance. But they've probably already stepped over the line they use for smaller deposits.

I have worked out my own finances like i have done for the last 20 years and we can comfortably afford the repayments for the full money lent so i'm not stretching myself to the limit of my finances.

I've sold mortgages. I've underwritten them. I've spoken to people in arrears. I've completed the paperwork that precedes repossession. The closer to the line you get on sale and underwriting of a mortgage the more likely arrears and repossession are. It's a statistical fact. That's why they draw a line.

On top of this i have other guaranteed income coming into the household that the lender dismisses as they cant find the correct box to tick!

Explain what it is. The brokers on this forum may be able to help you show it more clearly.

Where is the risk from the lender? in every worst case sernario the lender will more than cover their risk as there is so much equity in the property.

The more cases they have in arrears or the more repossessions they have, the more capital they have to set aside and the more expensive their wholesale funding becomes. Those are very clear risks to Nationwide.

This to me feels like the banks not been in touch with the individual needs of their customers and herding us all through the system with very little leeway or thought!

They're not a bank. They have to balance your needs as a borrower with the needs of their saving members.

Crap lending just a few years ago screwed the financial system. Do we want to repeat that?

If you think the amount involved is petty sell something and put the money in out of your own pocket.