Nationwide declined AIP

ViolaLass

breakingbad wrote: »

...plus I'm sure people get mortgages all the time with debt.

They can, but the point is still what their NET position is. You have net debt, not net savings, with no indication that you are able to save.

breakingbad

But we also have a very low debt to income ratio, which is well within lenders affordability criteria. Surely by reducing our debt by such an extent over the last 4 months this shows we are capable of saving, but we have just chosen to reduce our debts instead. The effect on the Net position should be the same, one would think.

Each of us have £10k gifted deposit sitting in our savings accounts (parents gave us cheques). Should we use some of this to pay off some of the CC debt, thus allowing us to save a bit? Or would that be looked unfavourably upon?

Mrstickle

If it was me, I'd clear the debt. Then save some more.

breakingbad

Does the fact that the gifted deposits are in our accounts already affect things? I've read that with most gifted deposits, the "gifters" pay it to the solicitors directly.

Could any qualified advisors on here (and that is in no way meant to disrespect Mrstickle and others who aren't) advise on whether we should use part of the deposit money to pay off part of the CC debt? Our parents gifted us £20k which is £4-5k more than we need for the deposit & fees etc.

The broker says another of Nationwide's concerns was apparently the amount of credit I had available to use. In light of that (since yesterday) I have closed one unused credit card account (available balance was £5100), reduced the credit limit on another to just £500 from £4500 (wasn't able to close yet as there were some upcoming interest charges, will close after next statement), thus vastly reducing my available credit. I'm aware this will increase my credit utilisation ratio but it seemed to be what was advised. I still have an £1800 arranged overdraft facility (unused) on my main current account, I'm unsure as to whether to greatly reduce this too, or would this be too much too quickly?

Mrstickle

no disrespect taken. I wish you luck with it. I have been where you have. I used a windfall (in my case a PPI payout and a redundancy) to clear the debt, put the rest into the 'house fund' then saved some more. Fortunately my husband was more sensible than me, and had more savings than I had. Good luck.

breakingbad

Any opinions on whether we should we use the "excess" gifted deposit to greatly reduce our card balances?

We would still have enough for the deposit and fees etc, and obviously would be able to add to the remaining deposit every month.

Thrugelmir

breakingbad wrote: »

But we also have a very low debt to income ratio, which is well within lenders affordability criteria.

Returning to my earlier point, you earn a good salary yet have no savings just debt. So a remote view will be that you don't manage your personal finances well. Lenders assess the likelihood of you repaying a debt every month on time for the next 300 months. The datasets that they access with regards to your last 6 years credit history. Enables them to profile you fairly accurately and score you accordingly.

breakingbad

I understand what you're saying, but they have not profiled us accurately in my opinion. We have never defaulted on anything we have owed. Of all our credit accounts, even all through our student and postgrad days when cash was extremely tight, we have never even made a late payment, and certainly don't intend to start now.

I feel our very actions in repaying debt every month have made it look to underwriters like we are struggling, which certainly isn't true.

However...regarding using some of the deposit money to pay off credit cards?