mortgage application

Phaelok

Hi everyone,

I recently went through an application with Halifax to see how much I could borrow against my income/outgoings. I earn just over £2k after tax and the only commitment I have is a loan for £246 and this is due to finish in 16 months time.

At the end of the application I was informed that further checks would be made and I would be contacted to confirm what I could borrow. Needless to say I have always settled financial agreements early and never been in arrears or had CCJs registered against me.

I have been informed today by Halifax that they would not be looking to offer me a mortgage at the present moment in time simply because 'they cannot build up an account profile'. When I asked him to clarify what this means, he said it would help if I take out finance elsewhere (e.g. loans etc) so that they can see a regular history of payment. Is this the case?

I decided to download a copy of my credit report file this evening as I was concerned about my rating. The responses for each category was mainly 'excellent', others 'good'. In summary the report stated that;

"Your score is highly predictive that you would be a good candidate for credit. You are above the average for UK borrowers. Most credit grantors would consider this score good. While many factors other than your score influence the decision to grant credit, you will probably not be turned down for loans based on your score alone."

Unless I am going mad, why should I take out more credit? I have always settled early, paid on time and never defaulted.

Please help...a confused and somewhat irritated mortgage applicant

kingstreet

Do you have a number of addresses in the last three years? Are you on the electoral roll? Do you have active current credit which you are using regularly? Is the loan visible on Experian?

For those without visible credit, the usual advice is to take a low limit credit card which should be repaid each month in full to avoid paying interest. However, this is designed for those not looking to purchase in the next six months.

What's the loan to value you applied for?

Phaelok

Hi Kingstreet

I have lived at the same address all my life and I am on the electoral roll. I do have an active current credit used regularly and the loan is visible on Experian, all paid and up to date.

I was looking at seeing how much I could borrow against my income but did not have a set amount or place in mind. I did explain to him that I have £10k in savings but could put down more if this was an issue.

kingstreet

The DIP form asks the likely purchase price and mortgage amount, calculating the loan to value. Did he try different variations to see what would pass and what wouldn't?

For example, usual routine is to try 89.9%, then 87.5%, 85% and so on...

Phaelok

None whatsoever even after he contacted me back following the application. In short he said the bank would not be willing to lend any amount, to take out more finance to build up 'an account profile' and to come back with a bigger deposit. I can understand the final suggestion, but fail to believe everything else he said.

kingstreet

It's an odd stance, given your current situation.

There isn't another "Mr Your Initial Your Surname" at your address is there?

I've known cases where father and son were both Mr M Jones and it caused all kinds of problems for us.

Halifax has only done one of its crappy soft searches, so you could try elsewhere?

Phaelok

No I am the only one with that initial and surname.

I think I will try elsewhere...slightly disheartening being refused when you have paid things up to date, never been in arrears and advised to take out further credit....no wonder this country is in the mess it's in.

Thank you for your advice...I will look at other places.

Poppy9

Can I just ask why a loan for £246 has another 16 months to run? Given your income I would have thought you would have paid it off. Try a store card for credit if you already have a normal credit card.

Phaelok

I have been making lump sum reductions to it Poppy but also save a significant amount to put this in my E-ISA account with Natwest. I also had a credit card with them which I subsequently paid and closed down. I could try a store card but feel bullied by these financial institutions to take out further credit when it is not needed, in my opinion.

chanz4

kingstreet wrote: »

It's an odd stance, given your current situation.

There isn't another "Mr Your Initial Your Surname" at your address is there?

I've known cases where father and son were both Mr M Jones and it caused all kinds of problems for us.

Halifax has only done one of its crappy soft searches, so you could try elsewhere?

I have offer and everything due to complete, no full search only quotation and unrecorded searches on Experian with Halifax.

why not try NatWest direct?

Dave_Ham

We are 2nd guessing to a degree, but is your address unusual?

For example are you flat 3, or is your address and/or name listed or spelt differently regularly.

It could be rather than decline you, they simply did not ascertain your correct credit file and therefore have no/limited information.

Forget the Experian score, it is worthless but with credit lines there is no reason for Halifax to decline.

Do some digging, or just get a broker who should easily be able to remedy this.

Good luck