Mortgage Decline - Try broker or call it quits?

Donnanorama

My partner and I are first time buyers and saved a deposit of £8k, hoping to get a Clydedale Bank 5% first time buyer mortgage on a property of £125k value. Before out first appointment, our parents kindly gifted us an extra £15k between them, £2k of which we used to pay off my partner's credit card.

During the process of applying with Clydesdale, the extra deposit money (we went with £20k deposit) has meant we changed to a 5 year fixed mortgage rather than the first time buyer deal. Our mortgage advisor came back to us almost immediately to say there was a problem - an old student credit card of my partners that, as it turned out, was settled 5 years and 9 months ago. It also highlighted a default from an o2 contract that he shut down last year, and had never received any further correspondence about. Apparently he had a final bill debt on it for just under £60. We settled that, got back to Clydesdale, and left it with their underwriters.

They got back to us yesterday to say that they were declining our application. They referenced the black mark from o2, and also that my partner went over his credit card limit a couple of times 9 months ago (his father died 9 months ago, paying his credit card and managing his finances was the last thing on his mind), but also that it was suspicious behaviour to pay off his credit card and that despite saving £8k, the fact that we had such a large gift in our deposit went against us because we didn't demonstrate we could save that amount.

So...my question is what do I do now? Clydesdale advised us to keep our noses clean for 12 months and try again - realistically, is this our only option? I realise the main problem is how recent the settled o2 account and the credit card limit being exceeded are, so I'm wondering if there's any point in going to a broker and raising our hopes again, or would they just have the same advice? Should we just accept that we will need to wait at least 12 months before we can try again, and try to save more ourselves in that time?

If we were to wait 12 months and try again, would we be able to call the extra money given by our parents our own savings by that time, or will it always be a gift towards the mortgage regardless of how much time has passed?

Sorry for the long spiel!

emzky

Try a financial advisor/mortgage broker. We did and that is how we got ours. I paid for our budget wedding using our overdraft which was only £800 for a few months and then it got paid off but because this showed on our bank statements they were going to refuse us! Luckily our broker spoke to them and said us borrowing from the bank and paying it back showed we were responsible. And they accepted. We also had all our deposit gifted.

Thrugelmir

Donnanorama wrote: »

and also that my partner went over his credit card limit a couple of times 9 months ago (his father died 9 months ago, paying his credit card and managing his finances was the last thing on his mind),

Please take this the right way. As said with a business hat on.

From a lenders perspective that is a very weak excuse. People have all sorts of personal issues to contend with every day of the weak. So when another crisis arises will you default on the mortgage payments a few years down the line.

Take the advice given. Learn to manage your financial affairs better. Then reapply later on when time has had an opportunity to show that you can manage money properly.

ACG

If you give up you wont get a mortgage.
If you try a broker you might.
No harm in giving it a bash.

colmac71

From personal experience try a broker - They know the lenders well and generally know which lender may be a little more lenient than others.

amnblog

Don't take Clydesdale as the final answer. There are lending options with 5% deposit that may be more suitable for your history.


Engage a decent mortgage broker.

Donnanorama

Thrugelmir wrote: »

From a lenders perspective that is a very weak excuse. People have all sorts of personal issues to contend with every day of the weak. So when another crisis arises will you default on the mortgage payments a few years down the line.

Absolutely taken the right way - I totally understand what you mean. We actually didn't even mention it to the bank as we knew it was irrelevant.

Thanks all for your advice. We will try a broker - worth seeing what, if anything, is on offer for our particular circumstances. We're also now prepared for having to wait 12 months and won't be too disappointed if the answer is to just go with plan B and sit tight.