AIP declined - Coventry. Guidance needed please?

PinkHouses

Hi

We have been declined for a mortgage in principle today. We don't currently have a broker but we have lodged an appeal. My husband's current mortgage is with Coventry which is why we approached them due to a £5k early repayment fee. Our intention was to port the mortgage.

Key facts:-

1. I earn £56k. Bonus of £30k this year and £40k last year. I have recently, as in last week, closed a credit card and a store card. I have a loan of £4,200 for my car and £6k on one credit card. No overdraft. No adverse credit. Equifax is showing "poor" rating but nothing of any note on it except I have only been living at this address for 2 years.

2. My husband earns £44k plus £6300 car allowance plus £5k bonus. He has 4 credit cards with £4,900 over the 4 of them. He has savings of £4k to cover this.

3. We have savings of £10k.

4. Husband's car loan will be paid off in May 2015 and is paid for by his car allowance.

5. Squeaky clean bank account and mortgage re-payments.

We wanted additional borrowing of £200k. Current borrowing £140k. 85% LTV. Deposit of £60k.

Coventry advised the reason for the decline was "exposure to debt".

We have appealed today.

We are considering whether to now approach a broker to find a lender that would say "yes". We are unsure who that may be, what our options are or whether we should wait several months, whether closing credit accounts this month may have an adverse effect....can anyone offer some help? We are a bit lost.

Thanks.

Thrugelmir

£136k of gross earning power yet only £10k of savings and unsecured debt owing.

What ever is on your your file for the past 6 years must have spooked the lender.

Quite possibly a case of let time heal your credit record. While in the meantime getting to grips with your finances. Clear the debt would be a start.

Appeals rarely work. As the lender is a business not a charity. So is within it's rights to decide who it wishes to conduct business with.

suziqqq

Hi Pinkhouses we got turned down too on an AIP to port our mortgage with our current lender C&G who we have had an impeccable record with for 13 years. We then went to a broker who got us an AIP straight away with the Halifax.
I advise going to a broker and telling them your circumstances upfront , they have the knowledge to know who will lend to whom. Yes it will cost you but saves a big headache. Good luck

PinkHouses

We have just got married and used most of our savings on that. Our savings will be £35k by the end of the year although I appreciate your point.

Coventry said it wasn't due to credit rating - we've checked our files and there is nothing on there.

dktreesea

Coventry BS may be influenced by recent remarks by the governor of the BofE and in particular his comments that they may cause banks to limit the LTV ratio or loan to income ratio they are permitting for their customers seeking mortgages.

This is something the government could easily address, by, e.g. requiring all borrowers with an LTV ratio less than 80% to pay their bank's mortgage insurance (indemnifies the bank in the case of any losses in the event the mortgage can't be repaid or if the undelying assets value falls.) In Australia, this used to be around 6% of the amount borrowed.

Technically I think what happens is is a bank in Australia wishes to make a loan with a LTV ratio less than 80%, the government requires the bank to take out mortgage insurance, and typically they pass the whole cost onto the customer.