Mortagage App rejected cos of pension!

starfish1

Hi,
Has anyone had this happen to them before? We have had our mortgage application rejected becuase my husband contributes too much to his pension!!
Our credit files are both good/excellent so can't understand this.
Would be interested to hear if anyone else has experienced this before and if we should appeal the decision.

Thanks

TBagpuss

Presumably this is based on the new affordability criteria. Would it be possible for your husband to reduce his contributions temporarily?

If you used a broker then they may be able to tell whether this is likely to be an issue with other lenders.

ACG

There are lenders who do not take into account pension payments.
There are other lenders who will ignore them as they are optional (you can opt out).

Speak to a broker.

amnblog

A pension contribution is not available to support mortgage payments so naturally affects affordability [pension contributions are a standard consideration in mortgage applications since April 26th].

Is it more accurate to say that you did not meet affordability for the lending you requested? The Lender would lend you a lower figure.

amnblog

ACG wrote: »

There are lenders who do not take into account pension payments.
There are other lenders who will ignore them as they are optional (you can opt out).

Speak to a broker.

Good point ACG.

starfish1

Thanks all for quick response.
Due to the nature of my Husband's work, the monthly contribution rate is a set figure and cannot be changed.
We were told we could borrow up to £300k but actually only asked to borrow £253k. Prior to application we analysed our monthly outgoings etc and didn't think affordability would be an issue particuarly as we didn't ask to borrow the maximum amount.
Our mortgage broker is baffled - they have told us our application was excellent and hasn't come across this before. I suppose this just goes to show that lenders will pick on anything these days to reject you!

Does anyone think its worth appealing the decision or should we move on and try a different lender?

Thanks all

ACG

He hasnt come across lenders reducing the lending amount because of a pension payment that was not mentioned on the application?

It doesnt matter whether your pension payment is set I wouldnt have thought. Your using the lenders criteria in your favour - if that criteria is to ignore pension payments then thats a good thing surely (assuming it helps you to get the mortgage and you can afford it all etc).

starfish1

the pension contribution was mentioned in the original application. it's just taken the lender several weeks to come to this conclusion!

ACG

So it was mentioned on the application and they are only taking it into account at underwriting stage.

Something does not stack up here.

starfish1

Yes that is what has happened - the application went through to the Underwriter and that's when the problems started.

The underwriter said there was something wrong with the application and originally thought it was an issue with our current mortgage and tried to claim that we hadn't been honest with the amount we owe(!).
When my Husband took the mortgage on our current property he borrowed an additional £6k. This was bundled into the mortgage so we owe our current lender £146k on completion of our property. This was stated very clearly from the beginning of the mortgage application process. However, they disputed this and requested a letter from our solicitor pledging that the full amount will be paid when we sell. Our solicitor then sent them a letter to assure them that this would happen.
They then decided that our current mortgage wasn't the actual problem and thought it was something to do with my credit file and after checking they decided I wasn't the problem.
After some pressing they came up with the pension reason! it's very strange and has taken several weeks to get some sort of explanation!. Obv feeling v fed up and frustrated!

amnblog

Name and shame the Lender.