turned down and confused

noggin1980

Hi,

I just applied to move my mortgage from nationwide to Santander and was turned down, didn't pass the affordability check, the guy didn't really seem to want to discuss it with me, perhaps it was because they were about to close. Can anyone tell me if I should expect to be turned down. We've never been more financially comfortable and moving the mortgage would have lowered our payments by £100 a month.

My Wife earns
40k from one job and 12k from another.
I'm disabled and don't work and get 8k in benefits, I will never get better only worse and the letters say they are indefinite, apparently this doesn't count as forever so its classed as secondary income.

We have 2 mortgages with nationwide totaling about 125k and our house is worth 165k. I asked to remortgage for 132k (which is 80% LTV)

We also own half of two flats with my sister in law.
flat 1 mortgage 95k, flat value 175k, mortgage payment £380, rent £825
flat 2 mortgage 105k, flat value 200k, mortgage payment £340, rent £925
Half of the income and costs are ours, it's about £450 profit a month after costs.

We also have investments that bring in £1100 a month which I understand they don't count.

We have a loan with Santander 20k over 2 years, which has 9,8k left (we've overpaid 2k so far) the payment for this is £892 a month. Could this be the problem? or the flats perhaps?

should I try ringing them back again tomorrow? are they normally willing to explain things? this guy basically said you failed the affordability, alot of your income is secondary income, thats it sorry bye.

Will this have damaged my credit rating? I've just done an experien check which says excellent 981 and shows no problems.

Anything I can do to improve my chance of being accepted? Thanks for any help
Tim

grifo2015

Hi Tim

I've worked for 2 mortgage lenders 1 high street, 1 of a more adverse lender
in terms of discussing the decline usually the guys on the phone will confirm the notes but it can vary as if it came from a credit risk team or if it was say regarding adverse they often can't discuss it.

However they should be able to give you some idea so it may be worth another call (it certainly wouldn't hurt)

In terms of affecting your file the decline can do IF it was run as a hard footprint application which most applications are however with a 981 excellent I would not think it would cause you many problems.

I don't know Santanders lending criteria, however I know some providers won't use benefits so I'd check if they used your income to,
in terms of the flats and loan this can be an issue as it can affect the scoring and affordability as often it will factor in your commitments so if your named on the flats mortgages as well as your own and the loan it could possibly of affected their affordabilty checks.

I would say to improve your chances obviously make sure of any commitments being paid where possible or lower as this certainly can help... otherwise I would say if your unsuccesful at the current provider take a look at the market wether on your own or via an intemediary if any providers do SOFT footprint credit searches you can get a descion without affecting your credit score however I'm not sure how many providers will do so.

I hope some of that may be of help to you

amnblog

Bank staff wont want to say anything that will cause them a problem later.


This is something in the background here causing a problem and it does not sound like anything you have mentioned so far.


What was the objective of the re-mortgage? Were you just trying to improve your rate or looking to raise extra funds?

noggin1980

amnblog wrote: »

Bank staff wont want to say anything that will cause them a problem later.


This is something in the background here causing a problem and it does not sound like anything you have mentioned so far.


What was the objective of the re-mortgage? Were you just trying to improve your rate or looking to raise extra funds?

Thanks, the main reason for remortgage was to improve rates, but we did ask to to borrow slightly more, our 2 mortgages with nationwide total about 125k and we asked to borrow 132k because either way we were over the 75% interest band so I was going to use 4k to do the bathroom and pay 3k off the loan.

Honestly we would be happy to pay a grand off the mortgages we have now to take us below 75% and then remortgage with nationwide at 1.74% 2 year tracker which will save us £150 a month. but since I didn't expect for a second that we'd be turned down here I'm now nervous that I'll struggle there too.

Would Santander have looked at my bank statements? they didn't ask for them or for permission to look, they are my current account holder. I do matched betting which might look bad to someone who didn't understand.

We had a default on the mortgage a few years back which was nothing to do with us and a complete !!!! up by nationwide, we requested our overpayments back 5k, they paid 5k twice which I immediately gave them back, unfortunately straight after sending the second 5k the computer obviously thought we owed them 5k and it went straight to collections, they apologised, removed it from our credit file and paid us £200. We've gotten both the flat mortgages since then though and it doesn't appear on our credit file as far as I can see.

noggin1980

grifo2015 wrote: »

Hi Tim

I've worked for 2 mortgage lenders 1 high street, 1 of a more adverse lender
in terms of discussing the decline usually the guys on the phone will confirm the notes but it can vary as if it came from a credit risk team or if it was say regarding adverse they often can't discuss it.

However they should be able to give you some idea so it may be worth another call (it certainly wouldn't hurt)

In terms of affecting your file the decline can do IF it was run as a hard footprint application which most applications are however with a 981 excellent I would not think it would cause you many problems.

I don't know Santanders lending criteria, however I know some providers won't use benefits so I'd check if they used your income to,
in terms of the flats and loan this can be an issue as it can affect the scoring and affordability as often it will factor in your commitments so if your named on the flats mortgages as well as your own and the loan it could possibly of affected their affordabilty checks.

I would say to improve your chances obviously make sure of any commitments being paid where possible or lower as this certainly can help... otherwise I would say if your unsuccesful at the current provider take a look at the market wether on your own or via an intemediary if any providers do SOFT footprint credit searches you can get a descion without affecting your credit score however I'm not sure how many providers will do so.

I hope some of that may be of help to you

Thanks I'll try calling again in an hour or so and see if I can speak to the lady who started the application with me since she took all the details and thought it would be straight forward.

I think the one difference from when I spoke to her is I said the benefits were for life and yet the letter says they are indefinate.

The father in Law kindly gave us £14,000 for Christmas (attempting to lower inheritance tax liability) unfortunately we invested that and 5k of our own since this was the best thing to do financially as it paid more interest than the mortgage/loan, had I known there was any chance we'd struggle to remortgage I'd have paid 6k off the loan instead (which is the max we can pay off before getting charged)

honestly though I expected my wifes income to be enough on it's own, weather they took my benefits, the rental income or the investment income into account or not.

noggin1980

rang up again, asked if they wouldn't mind explaining, again they told me the benefits and rent were secondary income and that they base it off interests rates rise.

I told him we could afford it even at 10% and that I thought the 52k from my wifes jobs would have been enough, he put me on hold for 5 minutes. Came back and said the affordability adviser had made a mistake in the calculation and it was affordable and booked me in for the telephone appointment tomorrow. Though he wanted to speak to the guy who made the mistake when he gets in at lunchtime before it's 100%.

So fingers crossed I have an 11am appointment tomorrow and all is well, but I might get a call I guess saying no again this afternoon. Fingers crossed.

Dave_Ham

I hope this will end well, although would not be confident as this is a direct Santander approach.


They are not known for covering themselves in glory, although nothing you have detailed would concern me at this juncture.


Best of luck

sdrio

Santander seem quite tough on that.

I applied to them for a mortgage, and failed on affordability. I was very surprised (and concerned) about that, but then got one with Halifax with no problems

Brighty

Don't know about Santander, but a lot of lenders won't count the rental profit as both properties are mortgaged, if mortgaged, they just want to know rent covers the mortgage+25%, if so they count it as 'self financing' and ignore both he mortgage and income, no matter how much profit you're actually pocketing. That's what Nationwide did with us anyway.


So, if they're ignoring rental income, your benefits and the investment income, then all they have to go on is your wife's salary with you as a dependant.


Brighty

noggin1980

Brighty wrote: »

Don't know about Santander, but a lot of lenders won't count the rental profit as both properties are mortgaged, if mortgaged, they just want to know rent covers the mortgage+25%, if so they count it as 'self financing' and ignore both he mortgage and income, no matter how much profit you're actually pocketing. That's what Nationwide did with us anyway.


So, if they're ignoring rental income, your benefits and the investment income, then all they have to go on is your wife's salary with you as a dependant.


Brighty

Thanks, sure but even then imo it's affordable with just my wifes salary, 1 person is normally able to get more than a 132k mortgage on 52k salary.

The only way it isn't affordable is if they ignore those incomes from the flats but do take into account the mortgages, if this were the case though I think it would rule out most buy to let owners getting a residential mortgage.

but I'm not counting my chickens, not yet even told my wife they have changed their mind, don't want to get her hopes up and then get a call an hour later telling me its off again.

When we got this mortgage with nationwide our income was 36k from my wife and my benefits. So I was very surprised there was a problem.

Thrugelmir

noggin1980 wrote: »

Half of the income and costs are ours, it's about £450 profit a month after costs.

A 100% of the mortgage is your liability if the other party defaults.