Turned down for Halifax DIP

unbeareableLightness

Hi all,

I'm a FTB with pretty good conditions all round. I tried to get a decision in principle from Halifax - and was promptly turned down! There was no explanation, nothing, just 'you don't qualify'. Can anyone shed light on this?

My situation: I want to borrow 220k, have a deposit of 110K (much of which is gifted from parents), salary of 40K + average of 4k bonus per year. I've been in the same job for 2.5 years, in the same address for 1.5 years and my credit score is excellent (I've checked with all three credit report companies).

The only thing I can think of is that I am asking for 5 times my salary as well as bonus and they may not count the whole bonus. But would they just turn me down completely for this rather than offer me a smaller loan?

Really panicked now about being able to get a mortgage at all. Please help!

Dave_Ham

It could be adviser inexperience, but you need to qualify why you were turned down.

Was it credit score fail or not being able to borrow enough. You could have seen the adviser that cam off training last week and has done 2 applications, so it may not be you.

Forget the scores on the credit files, are there any missed payments, defaults, CCJ's etc. showing?

A broker will tell you reason for decline in about 5 minutes with those reports you have.

Good luck

Thrugelmir

The size of the gifted deposit could also be a concern. As brings into play far wider unrelated consequences.

kingstreet

There is a result at the end.

"Credit score fail" for example. So the person who did it, saw what came back.

If it was affordability it would normally come back with "Alternative Lending Proposal."

I take it this was direct with Halifax?

Consider a whole market broker, taking along all three versions of your credit file and don't bother with these alleged "scores" they peddle.

Anyone with a similar name at any of your previous addresses with credit issues? Any joint accounts or other associations you've forgotten about which may have linked you with someone with credit problems?

Danni-R

It could be the 5 times salery thing. I think they are reluctant to lend 5 times to a couple in today's climate.

Bonus- Won't count for jack as its not confirmed income.

kingstreet

Danni-R wrote: »

It could be the 5 times salery thing. I think they are reluctant to lend 5 times to a couple in today's climate.

Bonus- Won't count for jack as its not confirmed income.

Put a basic annual income over £22k in here, with no credit commitments, dependents etc and a 25 year term and you'll get 5x basic.

http://www.halifax-intermediaries.co.uk/tools_and_calculators/mortgage_affordability_calculator/default.aspx

Variable earnings are normally allowed at 60% and averaged over the last three months.

Either way, that's a reason for an alternative lending proposal, not a decline.

KRS291

Sorry to hear you are having trouble. I have banked with the Halifax for 20 plus years, so when I came to getting a mortgage I assumed the Halifax would be the most likely lender to help me on to the ladder! Wrong!

I also had a perfect credit rating, a deposit saved up (no where near as big as yours) and was after a 95% LTV. No one would accommodate, so I saved up 10% deposit. Even then Halifax wouldn't go for it, no reason at all. Went with nationwide in the end. I would recommend applying in person in the bank or even better find yourself a good mortgage broker. The personal level in which you can discuss the application helps a lot. Also, they can negotiate you a good deal, advise you on how to go about things, and even talk to someone at a building society to discuss the reason. There is of course no reason why you can't do this. Go see someone face to face, there is no logical reason why you are being refused, especially with such a good deposit and income. Only if your work isn't on a permanent basis could it be an issue I'd imagine

unbeareableLightness

Thanks everyone. I've spoken to my mortgage advisor and they think it could be affordability, as I was asking for 5 times salary as well as five times the full bonus. But still, I'm annoyed that the Halifax lady I talked to on the phone was not helpful at all. She was like a robot entering things into the computer and coming up with 'computer says no' at the end.

Also, why would a large gifted deposit be a problem? My parents won't require me to pay it back at all (lucky me).

Thrugelmir

unbeareableLightness wrote: »

Also, why would a large gifted deposit be a problem? My parents won't require me to pay it back at all (lucky me).

They might well not. Other situations could potentially arise. That are beyond the lenders control. Comes down to each lenders policy and the view of the underwriter in the context of the individual application.

kingstreet

unbeareableLightness wrote: »

Thanks everyone. I've spoken to my mortgage advisor and they think it could be affordability, as I was asking for 5 times salary as well as five times the full bonus. But still, I'm annoyed that the Halifax lady I talked to on the phone was not helpful at all. She was like a robot entering things into the computer and coming up with 'computer says no' at the end.

Also, why would a large gifted deposit be a problem? My parents won't require me to pay it back at all (lucky me).

Halifax takes 100% of basic pay, but only 60% of your last three months variable earnings, as I said earlier.

However, this would have resulted in an alternative lending proposal, not a decline, IME.