Declined for loan - tenant or owner?

Romeo2014

Hi,

I have a joint mortgage with my ex for a property they live in and am currently living with my new partner in her house (not on the mortgage).

I've a credit rating of 850 and 100% of payments made on time etc but have been declined for a loan, despite being sent the invitation to apply for one from the bank - so I'm thinking this has to be do with the data I've entered not matching theirs?

For my `current` address where I live with my partner (her mortgage) I would assume I should put down that I am a private tenant and not mortgaged (as my mortgage is for my previous property) - is this correct?

The electoral role also shows me as living at this address from October 2012 when in fact I moved in 2011 (my bank statements etc all prove this too - so which date do I go with?)

Confused as with my credit rating and payment history cannot understand why I would be declined and think it must be due to the address inconsistancies.

Many thanks!

Tixy

In terms of length of time at the address go from when you actually moved in there, not how long you have been on the e/r there.

In terms of residential status I guess it depends on what question is asked.
If it specifically asks for your residential status at your current address then I would select 'other' (you are not a tenant if you live with your partner and don't have a formal tenancy agreement).
If it just asks your residential status overall then I would say you were a homeowner.

Or if you are unsure you could always either phone them up or go in branch and ask.

But it well may not be this issue that caused your decline. Did the bank give any indication for the reason for the decline? (remember the bank don't see your credit score from the credit reference agencies). Were you looking to borrow a large amount compared to your income and any existing debts?

19lottie82

Your "score" is irrelevant. Lenders don't even see it.

Address issues could be a factor, but so could affordability.

What's your salary, how much is your existing debt and how much are you looking to borrow?

Also, remember that as your have a mortgage with your ex, his credit is linked to yours, so if he has any negative marks, they will rub off on to your report.

Romeo2014

25k salary - 14k credit cards moving to 14k loan - outgoings £900pm - left over £700 - wheres the problem?

Debt just moving from one to the other so I can focus on repayment rather than moving around (i know its not the most effective way, but is the easiest for me - and as the credit card debt is across 4-5 cards on 0% (ending soon, hence moving), I get declined as I probably have money with most of the main lenders already.

Tixy

At a guess the problem is probably affordability.

A potential lender will assess whether you can afford to service the existing credit cards and the loan on top -as you may not use the money to repay cards or may run the card debt back up again. So they look at the worse case scenario of can you afford to service £28k debt on a salary of £25k.

If any of the card debt is with the same bank then the overall maximum would be slightly less - as they could force you to repay and close that card.

[Deleted User]

Romeo2014 wrote: »

25k salary - 14k credit cards moving to 14k loan - outgoings £900pm - left over £700 - wheres the problem?

As Tixy indicated, the problem is exactly what you've put above. Total available credit of 28k isn't going to happen on a 25k salary.

I would suggest breaking down your credit debts by rates and amounts and see what improvements you could make.

Gaz83

If you have £700 leftover, what do you need a loan for?

Thrugelmir

Romeo2014 wrote: »

25k salary - 14k credit cards moving to 14k loan - outgoings £900pm - left over £700 - wheres the problem?

The amount of money you owe allied to the fact that you still have a liability for the joint mortgage. Which makes you a very poor lending risk.

You need to tackle your debt head on. Only person that can solve the problem is you. Use as much of the £700 to start paying the debt down. Then you'll incur less interest and the debt will reduce quicker.

DCFC79

Romeo2014 wrote: »

25k salary - 14k credit cards moving to 14k loan - outgoings £900pm - left over £700 - wheres the problem?
I get declined as I probably have money with most of the main lenders already.

You answered your own question with the bit in bold, the lender has no idea of your plans, as far as they are concerned you could use the 14k on say a new car or a shopping trip etc. Use the £700 you say you have spare each month to pay off the cards.

Romeo2014

The majority of the £700 is tied up elsewhere (ie food shopping etc). I've just dropped the credit limit on my Barclaycard for 4k (was 9k now 5k) thinking that would have free'd up lending elsewhere - doesn't seem to have happened though >.<

Gaz83

Romeo2014 wrote: »

The majority of the £700 is tied up elsewhere (ie food shopping etc). I've just dropped the credit limit on my Barclaycard for 4k (was 9k now 5k) thinking that would have free'd up lending elsewhere - doesn't seem to have happened though >.<

If "the majority of the £700 is tied up elsewhere (ie food shopping etc)" then you don't have outgoings of £900, nor do you have £700 left over.

I would suggest working out for yourself an honest statement of account.