Rejected for mortgage - how cautiously should I proceed

hounslowfish

Hi all,

I am trying to get an 80% LTV mortgage (to borrow a total 3.4 times my income) for a one-bedroom flat. I feel that the payments are easily affordable as I save 1000 each month, and the mortgage payments are 200 more than my current rent. Various "affordability" calculators also say I can afford it. I have no debts and a well-established credit record with past debts all paid off on time and no late or missed payments nor any black marks on my credit files.

I applied with Nationwide, who I am a long-standing customer of, and, to my surprise, was rejected at the "agreement in principle" stage. The mortgage advisor said it was a problem with my credit history, but i have scoured my credit files from 3 different sources and not found a single black mark - e.g. Equifax give me a credit score of 489 / 500.

The mortgage advisor at the branch called "head office" and they told him I cannot appeal the decision.

The mortgage advisor I spoke to seemed inexperienced, and I strongly suspect he made a mistake in the application - e.g. he didn't ask me what credit cards I hold.

I plan to forget about my loyalty to Nationwide, and go with a broker, but I am scared that this rejection will leave a black mark on my record. After a mortgage rejection, when is it safe to apply for a mortgage with another bank? I'd like to apply asap, but would multiple searches on my file leave a dark mark on my file?

I'd appreciate any advice forummers can give, and also if any of you have any ideas why my application was rejected by Nationwide.

amnblog

Sounds like you have experienced what many will with bank in house 'advisers' as lenders have to give 'advice' to direct applicants from Saturday.

Engage a good independent broker and take the guess work out of this.

Chyna81

Hi,

I was agreed in principal with Nationwide and then declined on the full application however it was only when Nationwide applied for the full application that I noticed a search on my Experian credit file.

I then decided to go with Barclays who made an unrecorded enquiry on my Experian credit report, which I thought was brilliant as other lenders don't see this and my mortgage was approved. My purchase fell through due to seller.

I've now found another property however instead of staying with Barclays I've gone with Santander as they offer better rates and my mortgage has been approved. I've checked my Experian credit report and there are no signs of a search from Santander. It may be the fact the search is on my Equifax report but not sure.

In the space of 4 months I have applied for 3 mortgages with different lenders and I've been fine or lucky should I say and my credit report is still in the excellent zone. Don't give up.

Chyna81

Most important part I missed out is I do have a mortgage broker.

hounslowfish

For the benefit of those arriving from Google, I thought I'd add the outcome of this.

I discovered eventually that there were significant problems with my Experian file. 90% of the data were missing, including all my past loans, mortgage and most credit cards! I called Experian to query and they worked out that due to Experian's automated processed being unable to handle my "complicated address" (I have a flat number, a building name and a street number!) there were multiple distinct files in my name, each with fragments of my data. They fixed the problem over the phone, and the next day, my Experian file had populated with all my data (and a credit score of 999!).

After my file was fixed, I applied for a mortgage with first direct, who, I'm told are one of the strictest on credit ratings. I passed the credit check with FD and they have accepted my application pending valuation.

Moral of the story: If you are declined for credit, and there is no logical explanation, check your credit files. There's a good chance they have errors (or omissions!).

ethank

This is an issue with Flats unfortunately. I had issues with this also.

hounslowfish

Mistakes happen. What is very poor service is that banks decline on credit score, without giving any explanation (causing a great deal of worry!) and then refuse to consider an appeal after the problem with the file is fixed. Banks should tell you which lending criterion you didn't satisfy. Appallingly Kafka-esque that they don't.

To answer my own initial question, it doesn't seem to have done me any harm to have made multiple mortgage applications, though I will wait a while before applying for any more credit.