Mortgage Rejected - HELP

marliepanda

You still have a lower end deposit, are lending a lot of money plus a govt loan

Most people would be ploughing every penny into their deposit when it is low, you are spending money on gambling. It shows your priorities are not in order.

Lil_Me_2

Lenders are getting very cautious of any large amount of money going in/out of accounts. For the past few years I've transferred £50 a month to my housemate (ex) to cover any potential household related expenses. We're now in the process of splitting the finances in advance of me moving out, and he applied for a mortgage a few weeks ago. Later that week he transferred £500 out of the savings account into his own account, and then sent that onto me. It just so happened that it was the same day that the lender looked at his account!

Luckily the lender was his own bank, and they called him to discuss it with him before deciding that it really wasn't a big deal. Neither of us considered that it might be a problem, we're both financially stable and that amount wouldn't cause either of us any hardship on an average month but it was enough to spook the lender and they wanted to know if it would be a regular thing or not. Lesson learned to just keep the finances squeaky clean for the lender.

mak12345

Totally agree with that point but I'm surprised it wasn't discussed rather than just rejected. Let's see what the appeal process will bring!

mak12345

Marliepanda we are using the help to buy scheme as it suites our needs and future earnings. The deposit we have I'd say is significant and could be used to purchase an average house around here.

marliepanda

It is a lot of money, but in comparison to the price of the house it is low.

mak12345

Agree with that but that is not the issue (well it might be a factor) the big issue is one £2k gambling transaction in 2 years. I'm hopeful that the reasoning will be listened to. I could get some of the other directors to confirm its part of a syndicate and transfer all of the money back into my current account. I do appreciate everyone's input and to make it clear again I'm clearly in the wrong here as the only person that matters, the underwriter, thinks so!

DebtFree14_2

mak12345 wrote: »

Marliepanda we are using the help to buy scheme as it suites our needs and future earnings. The deposit we have I'd say is significant and could be used to purchase an average house around here.

Mark look at what you are saying. Your telling us how £2000 is only 30% of your monthly wage and its pittance and a one of transaction. Banks only want the last 3-6 months pay and bank statements because they want to see how things are now. The fact you haven't gambled before makes no difference, this could be the start of it all. Also you are using the Help To Buy scheme which lenders are more strict on. On one hand you seem to have so much money your bank can't hold it and on the other you are using a government scheme to help you buy a house. 40K in the bank, purchase price of 465K. You near enough have a 10% deposit. Why are you using a scheme?? This i think is the main issue. The Lender will look at the scheme as the fact you can't really afford things on your own and then you blow 2K gambling. Have you tired looking at getting it without the Gov schemes?

thequant

mak12345 wrote: »

Agree with that but that is not the issue (well it might be a factor) the big issue is one £2k gambling transaction in 2 years. I'm hopeful that the reasoning will be listened to. I could get some of the other directors to confirm its part of a syndicate and transfer all of the money back into my current account. I do appreciate everyone's input and to make it clear again I'm clearly in the wrong here as the only person that matters, the underwriter, thinks so!

As others have said pretty dumb to put this through your account just before a mortgage application, anyways what done is done.


I don't gamble so much myself these days, but I am a professional gambler. At my height I was probably transacting £10k-£20k per month through my bank account. The actual turnover per month was in excess £100k on the various betting sites.


Back in days before the crash, this did raise a few eyebrows. However closer inspection of my accounts showed I consistently made a profit and the banks weren't to concerned to deny me credit.


However we do live in a different world now, if you are doing any kind of gambling online then it's best to use a e-wallet like netteller. This way the bank doesn't get to see your betting transactions which are going to red flag your account.

thequant

DebtFree14 wrote: »

Mark look at what you are saying. Your telling us how £2000 is only 30% of your monthly wage and its pittance and a one of transaction. Banks only want the last 3-6 months pay and bank statements because they want to see how things are now. The fact you haven't gambled before makes no difference, this could be the start of it all. Also you are using the Help To Buy scheme which lenders are more strict on. On one hand you seem to have so much money your bank can't hold it and on the other you are using a government scheme to help you buy a house. 40K in the bank, purchase price of 465K. You near enough have a 10% deposit. Why are you using a scheme?? This i think is the main issue. The Lender will look at the scheme as the fact you can't really afford things on your own and then you blow 2K gambling. Have you tired looking at getting it without the Gov schemes?

100% Spot on post


As someone who builds risk models I can the OP how the banks look at this.


The bank could do a more rigorous risk quant based analysis and find that out those who are problem gamblers, are those who have never gambled before but then suddenly spend >30% of their wages in one month.


However there will be those like the OP who have a rational reason for such behaviour.


So it may be that 4 out 5 (i.e. 80% ) people showing such behaviour that turn into problem gamblers.


However this is the crux of the matter, you have raised your risk from 0.1% to 80%


The figures above are for illustrative purposes, and since the mortgage rules are new, they wont have such sophisticated risk models. Although they will have at some point.


So in the meantime, you are down to the opinion of the underwriter and your behaviour on paper has just massively increased your risk to the bank.

mak12345

A one off gambling transaction I still don't think is an issue. I can not see how this is any different to someone who books a holiday, buys a case of alcohol etc. I've no past issues with gambling or credit so making an assumption it's the start of a downward spiral is harsh. As I've said before it was clearly stupid as it's been rejected by the underwriter. Whilst I agree more stringent measures for lending are a good thing this seems a step to far. Plus your lifestyle is linked to your financial commitments, I'd think nothing of blowing £500-£1000 on a night out currently which of course would change if I had a mortgage to pay for. Assuming that because I've decided to put some money into an account for a big sporting event I'm all of a sudden I've lost all control is madness.