Mortgage help needed!! First time buyer!

Kalibur88

Hi all,

I really need some help and advice on my current situation.

Basically I am in the process of saving for a house. I have seen a house that I want which is relatively cheap as a repossession £70k in the north of England. I currently have £6000 in savings and was looking at putting down a 5% or 10% deposit. I currently earn £19570 per annum on top of around £1000 overtime which I think is considered average in the area I live (near Leeds).

I moved back to my parents 7 months ago to save and now I'm struggling to get a mortgage.

I went to a broker who checked whole of market and advised me to go with Halifax as they were generous with affordability (I have about £300 committed outgoings per month which are flexible)

My credit score is good and there are no defaults I also paid everything on time ever since I've had credit which is around 6 years and I have about 8 accounts in total all of which are up to date.

Halifax declined saying that my credit score wasn't high enough to offer me a mortgage. I went to barclays who I have banked with for 10years, I have an overdraft and credit card with then also and my wage is paid into this account.

Everything looked positive with barclays through affordability etc however the credit check came back declined the advisor said she can't understand why so will be challenging it for me this week but I want to know if anyone can answer the below?

There is nothing adverse on my credit file so why could I be refused a mortgage now when 2 years ago barclays gave me a mortgage in principle?

Can barclays staff/underwriters over ride the credit decline at all? I have showed them my credit file as I've nothing to hide. It seems if a person sat down with a bit of common sense they could see there is minimal risk and they will make money from the mortgage at 4.99% interest rate?

If I get a 'no' on Thursday this week what should I do next as I'm aware multiple searches will look desperate and bad for me?

A few facts about me.
I'm 26, male and in full time employment at my current job for 18months. I moved back to my parents 7 months ago and prior to that I rented a flat for 14 months on my own, before that I lived at parents for 24yrs. All my bills are paid on time and I am generally very smart with money, interest free credit card balance transfers etc.

It seems like you try and do the right thing by buying and now I'm hitting lots of stumbling blocks. Basically if barclays say no now I have no more options as no other lenders pass me on affordablility on my £300 a month outgoings on my wage which is a bit crazy.

Advice please anyone?

Edi81

Are you the electoral roll at your new address? This is usually one of the top reasons for credit score problems.
Have you obtained all three versions of your credit file?
I also don't understand how you have £300 of committed credit that is also flexible. As a proportion of your salary that is pretty high.

ACG

Have you looked at all 3 versions of your credit file?

Are the adverse markers on all 3?
What adverse do you have? Woolwich stance is to decline anything within 3 years (although the odd late payment may not be so bad).

Your broker needs to get to the bottom of the decline before making any more applications. It may be possible to overturn the decision with Woolwich but it depends on the reason - if it was a hard decline or not (your broker should either known this by the decline code(s), or be able to check with Woolwich).

Kalibur88

Thanks for the replies guys,

Right ok there is nothing adverse at all on my credit file. I am on the electoral role at my new address. My mortgage broker said the Halifax application won't show as a decline on my credit file he described it as my score isn't high enough for Halifax to lend to me but assured me this won't show as a decline. Yes I have requested all 3 files. I've got equifax and call credit both of which show no errors or defaults/ alerts and are good, I'm just waiting for experian to send me my pass key through the post.

With regards to my outgoings being committed but flexible, basically I have a lease car from work for £190 which I have the option to downgrade/upgrade every six months so effectively im only committed to that for 6 months at a time, I pay £60 a month off my credit card however the minimum payment is only £11 so what I mean by flexible is I could reduce this amount if need be

ACG

Sorry, my mistake. I read your post as though you did have adverse.

Lenders will not look at what you can do with your car, they will look at what you are doing.

With the Credit card, chances are they have a standard calculation for that anyway.

I think you need to get to the bottom of the decline with Woolwich before going too much further. With no bad credit and affordability being reasonably ok, im a little unsure as to why you would be declined.

Kalibur88

Yeah that's what I'm going to do. I find out Thursday whether they will overturn the decline on my credit score so if they don't I'll ask why.

What can I do if it's a no with Woolwich? Should I wait a few months and try again?

Kalibur88

So guys, woolwich came back and advised hey cannot over turn the decline and said the below

'Unfortunately your application didn't meet the banks internal credit score.unfortunately this is made up of different components,none which we can influence. There is nothing we can do at this time to overturn the decision.'


They have suggested trying again in 6 months.


I received my experian credit report today and there is one thing which bothers me but not sure how much it affects my score.

Basically when I moved out of my flat yorkshire water slapped me with a£120 bill out of nowhere which I disagreed with. I explained to them that with the moving costs I didn't have the spare cash to pay this unexpected bill so arranged a payment plan with them of about £22 a month. I kept in contact with them and paid on time however this shows on my report as being unpaid/late for 4 months which I think is unfair considering I rang them to explain.

Apart from that my credit report is absolutely fine and you can clearly see all my other credit has been always paid on time.

There are also now 3 mortgage footprints on my file, 2 from the mortgage advisor and 1 from me going to barclays.

Any suggestions how I make myself more attractive to lenders and if in fact it's worth even trying again in 6 months?

Also should the Yorkshire water issue show on my credit report? It's not as if I didn't pay, I called them and explained my circumstances so can I get this taken off?

Is it just bad timing? As I wonder if the banks are being strict at the moment with all the media attention of help to buy?

Advice welcome

Thrugelmir

Kalibur88 wrote: »

Basically when I moved out of my flat yorkshire water slapped me with a£120 bill out of nowhere which I disagreed with. I explained to them that with the moving costs I didn't have the spare cash to pay this unexpected bill so arranged a payment plan with them of about £22 a month. I kept in contact with them and paid on time however this shows on my report as being unpaid/late for 4 months which I think is unfair considering I rang them to explain.

From a lenders perspective at a very basic level. Your credit report is not fine. You struggled to pay a £120 bill and so made arrangements to pay in installments. Now 7 months later. You are expecting to be lent over £60,000 to buy a property. Which will require you to make around 300 on time monthly payments.

Lenders will require evidence that you are managing your money well, i.e. no issues reported to the CRA's before reconsidering your application.

Take the opportunity while living cheaply at home to clear your debts and boost your savings.

Kalibur88

I understand what your saying but by the same token I have on my file 2 credit cards, 1 showing 6 years worth of payments all on time which is now cleared , the other with 8 months of payments on time more than the minimum payment, 2 store cards which are now cleared, a phone bill spanning 3 years always paid on time, gas/electric for 14 months always on time.

It wasn't that I couldn't pay I believed they were overcharging me however so offered to pay them in instalments. Either way the pros far outweigh the 1 issue here plus this also doesn't show on my equifax report.

So for them to assume I can't afford to spy when there is more evidence to suggest otherwise seems a bit far fetched. Plus this a computer making the decision based on credit score isn't it?

Equifax rated my score at 8 points away from excellent so on the high side of good.

I know there's nothing I can do at the moment but it's just frustrating

ACG

Ignore the score equifax/experian give you - it may as well be plucked from thin air. Thats the score they give you and not a lender... its useless.

Stop making applications! - Thats the first thing.

You need to speak to a broker and let them do the research (which will include speaking to underwriters or account managers - not sales people). This will give you the best chance of getting a mortgage through.

With a 5% deposit your credit history has to be pretty much perfect. I would say your chances of getting this through with any lender is pretty slim, there is only 1 I can think of who may accept it and theyre not a high street lender.

Look at this from a lenders point of view...
Hundreds of people make applications every day and 90% of those may not have bad credit, so why would they take an additional risk on you when they can accept someone else in your place?

Im not having a go btw. You may deem yourself as low risk, at 95% LTV there is no such thing, it is a risk to them.