FTB mortgage application problem

ToriP

Hi all

Does anyone know the criteria scottish widows use to base their mortgage application decisions on?

I've recently had a 90% ltv refused and 75% offered down to credit scoring.

I'm wondering what I may be able to do to improve things for next time.

Thanks

Regards

Tori P

Thrugelmir

What's on your credit report?

Was the 90% LTV affordable?

ToriP

A default of £150 from 2010 but advisor said that shouldn't be too much of a problem

Partner self employed with 8 months of accounts

90% would have been more than affordable

Thrugelmir

ToriP wrote: »

90% would have been more than affordable

That's you personal opinion. Which is most likely optimistic. People on the whole under estimate and fail to make sufficient provision for all sorts of costs.

Partner self employed with 8 months of accounts

This would have had an impact on the offer. 8 months isn't long enough to establish a track record.

amnblog

Not enough information to go on here, SWB are unlikely to deal very well with credit file issues.

We deal with them every week.

ToriP

Thanks for replies
A bit more info:

Me
FT PAYE £4150 gross per month

Unsecured loan £10000 (monthly repayment 340)
Unsecured loan £2500 (monthly repayment 80)
Default 2010 of £180 settled

Partner
PT PAYE £880 gross per month
SOLE TRADER gross earnings £4200 per month

Unsecured loan £6000 (monthly repayment 250)
Car finance £3000 (monthly repayment 180)

Sole trader for 8 months

We have decided to wait for 12 months accounts. Would we have more chance of a 90% LTV if over the next four months we just paid more off the loans? We have a couple of unused credit cards also

Beckyy

With £850 of loan repayments each month I would guess they will be having a big impact on affordability and how much they are willing to lend to you. Are you able to pay any of these off? Your advisor should be able to give you advice on the best step to take, if they can't then go to a better one.

ToriP

Well we wouldn't be able to pay them off in the next four months but could make some headway. I was just wondering if it is better to use money to pay down the loans quicker or just have a higher deposit.

I asked Scottish Widows the reason for only offering the 75% LTV, was it the lack of accounts or credit score and she said it was the credit scoring. She was just customer services rather than the underwriting team though.

So, what I see for us now is:

1) wait four months till partner has a full year of accounts under his belt which should open up a few more lenders and help with projections

2) pay down the loans quicker, which in turn should help affordability calculations in four months. I doubt it can all be paid off but I can try and attack a big chunk. Would you put deposit money towards this?

3) close a couple of credit cards so less available credit which may help credit scoring


The property is around the £168,000 mark. So a 25% deposit would be £42,000 which we just don't have and wouldn't have for a very long time.

Din85

I would be looking at paying as much as possible from the loans, as said it will be affecting affordability, there is not a lot you can do about the default.

I wouldn't worry so much about unused credit cards.

ToriP

Ok well I'll try and overpay the loans over the next few months. I know that'll reduce the total amount and term and save some interest. The loans are about 10% APR as an average.

I have paid £14.99 for an experian report. Should I purchase an equifax and the other one (name escapes me) or will this be a waste of time considering we'd need each for each of us. I just thought if they said it was down to credit scoring there may be an issue with a report.

I've come on here for advice initially and then I'll be better placed to meet a broker. My friend has someone they would recommend. I would like to do what I can first and be prepared

ToriP

Also, does anyone know of a good monthly budget planner I can use. Online or print based as long as it is printer friendly. I want to get good accurate in/out figures