FTB HTB2 RBS Mortgage Declined... now what?

adamck

HI Guys.
Ok so a brief run down...

Joint mortgage app, both FTB's and £50k combined salary.
Solid jobs (NHS / Solicitors).
£230 monthly Car Finance (only credit we owe).
£8000 deposit (just over the 5%).
House price £153K (about 45K less than we where offered as a max).
Credit files (100% clean for me, 1 x 4 year old settled default on partners for a £120 phone bill, settled 4 years ago, rest is all clean).

Mortgage declined...

They can't tell me why, they have no notes and no info... still waiting for mortgage advisor to call and give me the full details as he was supposed to call yesterday and didn't... I've had to do so much chasing!!

What can i do now?

Im guessing its due to the settled default, as this is the only negative thing on either of our credit files (I've checked noddle, experian and equifax).

Is there much chance of us getting a deal from anyone with a settled default and with 95% LTV?

Not much of a help to buy if they won't give people mortgages...

We pay £600 a month in rent, the mortgage was going to be £770 so not like its breaking the bank.
The whole idea of this HTB2 was to get people who can afford a mortgage but can't afford the deposit onto the property ladder.

I understand a default is a default... but its settled and has been for years.
We did contact O2, who point blank refused to do anything to help, they won't remove the default at all.

Will i have a realistic chance of getting a mortgage from anywhere now? or do we have no option but to wait tip 2016 for the default to be removed?

Gordon_Hose

Getting a 95% mortgage is going to have much stricter lending criteria as its a bigger risk for the bank. I suspect having any sort of default is going to go against you, at 70% LTV it may not be an issue, at 95% it probably will be.

I've just been accepted for a HTB2 mortgage, pending underwriters and valuation/survey and our credit files were completely clean. We also have no outstanding debt bar £300 on a credit card which will be paid off at the end of the month.

adamck

I understand that its due to how strict they are, the less you borrow the more relaxed they are... thats obvious.
Getting hold of £8000 is a little easier than getting hold of ~£50,000!
The point I'm making, is that the HTB2 isn't really helping, and the lending criteria is so strict that someone with a very minor settled default cannot get a house with the scheme... whats the point.
The idea was to make more 95% LTV mortgages and relax the credit requirements a little by making the deal less risky for the lenders.
All they have done, is kept the strict criteria, upped the interest and made it 95%.

kingstreet

The intention was never to relax credit requirements.

Neither the lenders, nor the Government, wants to increase the risk, so there was no plan to increase income multiples, nor accept adverse credit of any kind.

The plan was to relax the capital requirements to allow lenders to offer more 95% mortgages by linking that to an indemnity fund to cover the cost of reposessions.

Gordon_Hose

A default isn't 'minor' though, its about as serious as it gets.

Personally I wouldn't apply for any sort of mortgage with a default.

ACG

The idea was never to relax the credit requirements it was to increase the flow of money.

HTB is there to overcome people struggling to save a deposit and that issue alone. Everything else has to be perfect.

You sound annoyed at the lenders, if anything it should be your partner your annoyed at. Your asking to borrow money, they can accept or decline anyone they like. With demand being so high for this product they can choose the best of the best so to speak to reduce their risk as much as possible.

There could be 100 people in a similar position to yourself but without the default so why would they lend to you? Sorry to sound harsh but i think it needs to be said as it is so you can see it from the lenders perspective.

EDIT:
(Just noticed Kingstreets post, he beat me to it but i think our post pretty much cover the same point... he knows more about HTB than any other broker i know).

2nd EDIT:
Following a post higher up i have just been to look at your other thread(s). You seem to be looking at it all wrong. You could have a default for 50p, its not the monetary amount its the fact that you have the default in the first place. The lender looks at your payment history to get an idea of what you will be like in future - a default shows you have a history of not keeping on top (no matter how minor). If you had known at the time the default would stop you getting a mortgage, i would put money on you finding a way to pay it - whether it be asking a friend/family member to pay it or whatever it may be.

Again, i dont mean to have a go but its important you understand the reasons behind it - you can agree or disagree whether its correct/moral whatever but at least if you understand how lenders look at it, you can plan accordingly in future.

leccyblue

Hi,

Surely you were expecting this - in your previous posts regarding your Vodafone default and your partners O2 default, at least two mortgage advisors who are regulars on the board stated that a 95% LTV application with a default would be rejected. The government schemes are there to help people who don't have enough money saved for a deposit - not to help those people with adverse credit. Banks are never going to relax their lending criteria with regard to adverse credit at 95% - it's far too risky for them.

I can understand your frustrations that this has been caused by mobile phone defaults - but sadly these are your errors, not the banks, nor the governments. I'm sure there are reasons as to why things 'slipped' - but had you treated these accounts with the same respect as you would a credit card, loan, or mortgage, you wouldn't be in this situation now.

Your options are to either wait until the defaults drop off, wait until you've got a big enough deposit so that the defaults don't matter, or find a lender that will accept 95% LTV with defaults and find a guarantor who is willing to gurantee your payments by either putting money aside or their own home at risk.

You just have to be patient. We've wanted to purchase our own home for years - we are due to complete in January but it has taken 2 years of frugal living and hard saving to get there.

I'm sorry if this sounds harsh but these are the facts; and no amount of pleading your case of 'unfairness' is going to change them.

Good luck!

Gordon_Hose

Some people just won't listen!

pabl0

My partner and I were also declined a HTB2 mortgages with natwest after the underwriters stage, our situations are similar I just have three year old late payments rather then a default.

We were told if we applied in three months we would be accepted (strange we thought?) turns out natwest can't complete this year and declined us with some guff about credit scores hoping we'd hang on and try again then.

We've since tried nationwide with a local independent broker and have just had our valuation carried out today, although we are now going for ten percent deposit and a much better rate. Touch wood everything is looking up.

Why not speak to a good local broker and hear their opinion?

adamck

The only default we have is SETTLED and had been for 3 years.
We asked the mortgage advisor about it and he said he was sure it would be ok.
I did listen, I listened to our mortgage advisor!

My question isn't an argument, it's where do I go now...
I can't get the default removed even though it's old and settled.
Do I give up? Or try a broker?

Dave_Ham

I think a lot of the response were tailored towards the way your OP reads, it does appear to be a rant.

The fact that the default is settled (thanks for the capitalisation) is pretty much irrelevant. A default within a 6 year period, will kick out your application with all of the lenders on this scheme. To be fair, a default is registered with 3+ missed monthly payments and if and when paid it does not mean it gets removed.

Lastly, you asked a mortgage advisor for their opinion which unfortunately is not neutral. They are often targeted on applications and not offered and it costs them nothing but time to give it a go. Many of these advisors are non-advised only in any case.

I do not personally think it is worth your time (or there's) having a chat with a broker on this scheme.

Is a sole application possible?