Mortgage Refused...is the dream over?

mrsbmartin

Hi all!!!

Due to a dispute with Liverpool Uni that I lost, I have a ccj on my file that has been completely paid off but still has about 3 years before it comes off. So my husband is applying for a FTB 95% mortgage on his own. He has banked with Natwest for his whole life (now 36) and is a full time paramedic with pre tax earnings of £32k. He has a personal loan with NatWest, car finance with BMW, a gym membership, contents insurance and student loan payments etc leaving his account every month.

During his official mortgage application interview at Natwest, the advisor had a someone else in with her who appeared to be assessing her. My husband said that the mortgage advisor told him during the interview that his outgoings were too high for him to be accepted for a mortgage once she added them all together (in particular, he has a DD for £36ish to the HPC, which is necessary for him to practice as a paramedic, which she said just tipped it over the edge and without it the mortgage would be approved). DH told her it was possible to transfer his DD's like the HPC, Gym etc to me but the person assessing the advisor said it was not a problem and told her not to include them on the application.

The application was then passed to the underwriters who have refused the application - citing DH's student loan as the reason.

The property DH is buying is so ideal for us, perfect location and as sure an investment as possible (£89500 purchase price but a £10k spend will see the value go up to £120k+ in present market conditions). It was listed on RM, we viewed it, got accepted and had the listing taken down all on the 13th of Dec. The seller had only just started the probate process and due to Christmas this was expected to take 4-5weeks. I think it may well be close to being sorted now as I had a call today from the agent to ask if I wanted anything leaving in the house as the seller had a charity doing a house clearance.

Obviously we are gutted and really worried that we are going to lose the house. Natwest obviously have full access to DH's financial info and the mortgage payment would have been over £70 cheaper than our current rent. He doesn't use his OD facility, has no defaults etc and so the decision does seem counterintuitive but I fully understand that decisions need to be made on numbers not 'sense'. The one saving grace is, because the interview didn't exactly fill DH with confidence, we still haven't instructed our solicitor or got the survey done (both are poised ready for action with funds in place to be paid straight away- solicitor very local and quick - highly recommended) so if we lose the house we lose face rather than cash (and a great house where we can create a decent amount of equity ).

Does anyone have any ideas on how we can retain the dream?

Thank you!!!!!!!

Noctu

Could you visit a good independent financial advisor? They will have experience of this sort of situation.

kingstreet

See a broker who can offer different lender options.

Going to NatWest was putting all your eggs in the single basket and the outcome was only going to be a yes, or a no.

A broker may be able to offer you several yeses.

mrsbmartin

This was my thought but DH is a loyal sort that still seems to think that local banking exists...it just isn't the case sadly. The problem is that DH has received MIP's from Natwest about 4 times over the past couple of years (just to check that it was ok to start hunting for a house) and not once have they told him that his outgoings are too high until it was 'too late' and we had found a property. Prior knowledge would have seen us shift about some DD's, we probably wouldn't have gotten married etc (the wedding was a £4k second hand designer lakeside beauty that looked like it cost £10k but still - if we thought there would have been a problem we would probably have put it off).

I have urged him to call a broker but he is currently at work so hands are tied for much of this week (he is on 7am-7pm shifts). Feel SICK

kingstreet

NatWest underwrite at 95% more stringently and apply an affordability rate of 7%, so he would probably have been accepted at 90% but not at 95%.

When he was having these (uncreditchecked) agreements before, they must have been at 90%, because NatWest didn't offer 95% until HTB - MG was launched in October.

Loyalty to a financial institution is an outdated concept which will not be rewarded by cheaper or better quality products, or better service.

Frankly, he wants to buy a home or he wants NatWest to be happy. Which is it?

Brokers work all kinds of hours. We do stuff at times lenders would not dream of in their cosey 9 - 5 existences. We're working from 6am to 8pm at the moment and most weekends on call too.

mrsbmartin

You are totally correct - the initial MIPs were at 90% but when we went to the bank on the 13th of Dec we asked them to quote at both 90 & 95% and they said the 95% would be fine. He has called London & Country and they have basically said that the 2 main issues are the 95% and my existence (because I am not going on the mortgage I am a dependant & my earnings don't count towards his income - I give £400pcm plus pay for food etc).

The deposit is being gifted by DH's mum & dad...we can ask them to help out to increase it to the 10% but would this be enough of a change?

If we transfer some of the DD's to my account will this help? It will mean that my £400 won't be going into DH's account but if that has zero impact on his official income surely this will help his overall ingoing/outgoing ratio & therefore up the affordability?

Can we just separate for the period it takes to get the mortgage secured?

Getting a bit desperate as we fall down the inescapable black hole that is perpetual renting.....

kingstreet

Find a local broker you can sit down and talk to, please.

Establish what you need to do, rather than suggesting off-the-wall and frankly frightening solutions like splitting up.

mrsbmartin

DH has also asked if it is worth trying to get rid of his car finance (may be cheaper than the extra 5%) and then going back to Natwest(??!! Told you he was loyal). The loan payment for the car is £150pcm.

GMS

What was the date the CCJ was registered?

opinions4u

Tell him to stuff loyalty.

Get to a broker and get your dream back in plan.

kwmlondon

Go to an independent financial adviser. Get a recommendation , if possible. My IFA has been a godsend.