Is it worth appealing when mortgage declined?

Nissy72

I had a mortgage application declined today with Barclays Bank having spent 40 minutes on the phone making the application, for the computer to say NO. Is it worth me appealing to see if a human being can assess the real risk and overturn the decision??

I was turned down due to my credit score - defaults from 2 years ago totalling £200. Plus I earn less then the amount I owe on a credit card??

I only want to borrow £35K - to clear a £12K Barclaycard and for some Home Improvements. I own my own home without a mortgage valued at around £120K. I earn just under £10K and the remainder of my income is topped up with tax credits and child benefit. I meet the affordability criteria with my salary alone. Mortgage payments would be slightly less then paying the minimum payment on my credit card.

I would love to know what the risk is - the bank would have £85K equity in the property. I would not have the credit card debt. Defaults equating to £200 which can be paid immediately surely does not strike the average person as being a massive risk?? I am trying to be sensible and getting my finances in order having been ill and out of work and going through a divorce - for the last two years however, I have been working and financially stable.

Is it worth appealing?? Any advice would be gratefully received.

Thrugelmir

Defaults equating to £200 which can be paid immediately surely does not strike the average person as being a massive risk??

As a lender why do I want the hassle of dealing with a customer that accrues 2 defaults totalling £200. When there's thousands of potential customers with far better credit profiles that are almost certain to repay their debts without as much as a murmur. Debt recovery is a highly time consuming expensive business. That soon wipes away any potential profit on a mortgage, given the very low lending margins. The amount of interest you are paying on your credit card is a far better reflection of the risk you potentially pose.

In answer to your question. There's no point in appealing.

haras_nosirrah

Because from their point of view despite having no mortgage to pay you wracked up 12k of credit card debt. You say you are going to clear it but you may not and even if you do they can't stop you running it up again

Mortgage_Mark_2

Nissy72 wrote: »

I had a mortgage application declined today with Barclays Bank having spent 40 minutes on the phone making the application, for the computer to say NO. Is it worth me appealing to see if a human being can assess the real risk and overturn the decision??

I was turned down due to my credit score - defaults from 2 years ago totalling £200. Plus I earn less then the amount I owe on a credit card??

I only want to borrow £35K - to clear a £12K Barclaycard and for some Home Improvements. I own my own home without a mortgage valued at around £120K. I earn just under £10K and the remainder of my income is topped up with tax credits and child benefit. I meet the affordability criteria with my salary alone. Mortgage payments would be slightly less then paying the minimum payment on my credit card.

I would love to know what the risk is - the bank would have £85K equity in the property. I would not have the credit card debt. Defaults equating to £200 which can be paid immediately surely does not strike the average person as being a massive risk?? I am trying to be sensible and getting my finances in order having been ill and out of work and going through a divorce - for the last two years however, I have been working and financially stable.

Is it worth appealing?? Any advice would be gratefully received.

No you don't, that's the point. You're looking at borrowing 3.5 times your gross income, without taking off any committed expenditure and the cost of living. When looking at debt consolidation, some lenders will factor in the cost of keeping the debt also, as there's no guarantee that you will repay it and they have to look at the worst case scenario.

Speak to a broker, you might find an option with another lender. Get a copy of all three credit reports (Experian, Equifax and Call Credit/Noddle) and speak to a broker about it, they might be able to help.

In answer to the original question; no point in appealing.