Been declined... what to do...

Fashionably_Late

We saw a whole of market mortgage broker. She found my husband a mortgage with Chelsea for 95% LTV and 2 year fixed. The purchase price of the house is £290,000 and hubby earns £102,000 per annum. We do have some debts though. Chelsea declined my husband for an API saying that he had recent defaults with two credit cards. My husband called the two companies and also ordered copies of his credit bureaus. He did have arrears that are now rectified but no defaults. The card companies verified this to us.

What can we do? Apparently it was a Chelsea underwriter that declined us. We are a bit angry because yes, they were arrears but not defaults. And if the broker knew they were that picky, why put us forward for them? Is there any lender that will look at 95% LTV with arrears in the last 6 months? He isn't asking for huge income multiples or anything and we can easily prove his income. The mortgage doesn't need to be fixed either. We are very flexible. My husband is understandably upset and ready to just give up.

UK007BullDog

Your broker assumed that with such a high income that you might be prime candidates. Did you tell the broker about the arrears during the fact find interview?

Well all is not lost. You might want to sort out your arrears first of all and get up to date with that and start saving up some more deposit.

I am not a broker so cannot give advice if there are any other lenders out there willing to lend up to 95% on arrears going back six months or even longer. I am not 100% sure but arrears older than 6 months could be classed as defaults, vaguely I remember a case last year where the underwriter said something like that. Because even after 6 months you still have not managed to get back up to date with your payments. So they might class it as a risk they do not want to take on.

Has your broker offered you any other alternatives?

luckyfool

Fashionably_Late wrote: »

We saw a whole of market mortgage broker. She found my husband a mortgage with Chelsea for 95% LTV and 2 year fixed. The purchase price of the house is £290,000 and hubby earns £102,000 per annum. We do have some debts though. Chelsea declined my husband for an API saying that he had recent defaults with two credit cards. My husband called the two companies and also ordered copies of his credit bureaus. He did have arrears that are now rectified but no defaults. The card companies verified this to us.

What can we do? Apparently it was a Chelsea underwriter that declined us. We are a bit angry because yes, they were arrears but not defaults. And if the broker knew they were that picky, why put us forward for them? Is there any lender that will look at 95% LTV with arrears in the last 6 months? He isn't asking for huge income multiples or anything and we can easily prove his income. The mortgage doesn't need to be fixed either. We are very flexible. My husband is understandably upset and ready to just give up.

There are a number of lenders willing to look at that, a broker "may" be able to source you a prime product at 95% that will assist, alternatively if the only issue is delinquent payments then there would certainly not be any problems obtaining a "near prime" mortgage from any of a number of lenders. Arrears on unsecured credit in the last 6 months would not present any significant problems. A lender springing to mind as particularly competitive and likely to be able to assist either on their Prime or Near Prime range is Accord (the intermediary arm of Yorkshire Building Society) but there are any number of others.

If the broker you were dealing with has not found you an alternative lender who will do the mortgage for you then you may be better sourcing another adviser more experienced in this area.
As to their initial decision to place you with Chelsea -they will only known of the late payments on the credit cards if you told him/her, and there is always an element of risk submitting a case to any lender that they do reserve the right to decline an application. Some lenders are much more likely to renege on an initial agreement in principle further down the road than others who do not fully underwrite a case until it has been submitted fully. If a case was marginal or borderline then I would always explain these risks and offer the option of a lender with more robust initial underwriting as well.

To recap, either speak to your broker to get something else sorted out, or if you have lost confidence then move on and find another. There should not be any issues at all sorting something out for you. If you would prefer a fixed rate then I would move sooner rather than later as lenders are putting fixed rates up on what seems like a daily basis just now and I know of a number of lenders who have already announced rate withdrawals for early next week,

Hope this helps,

Joe

Fashionably_Late

Thank you both so much. We were completely honest about the late payments and even gave a copy of the credit report to the broker to help. The reason we would like a 95% LTV is to pay off all the unsecured debts. But we could put 10% down but then we would have the unsecured debts still outstanding. We have never, ever missed a mortgage payment.

How would we go about finding a good broker? We have now had two and both have just messed us about.