Declined for mortgage in June last year - impact on mortgage app now?

daffymoo

Hello
Myself and my husband applied for a 95% mortgage with Aldermore last year (June) and were declined at underwriting stage due to "current account conduct". The reason we were with Aldermore in the first place was several missed payments within that year on my husband's account. Mine was clean.

We've now saved up a lot more and have a 10% deposit. No missed payments in the last year on either account, and current account conduct is much better - no bounced DDs, unauthorised overdraft usage etc and money left at the end of the month.

We've seen a house we like and had an offer accepted (£220k, our incomes are £42k and £27k respectively). We still have some outstanding balances on credit cards, and I have a HP on a car. No dependents.

We have an AIP from Natwest who do a soft search which has been sufficient to have our offer accepted.

We're now looking to proceed to full mortgage application (possibly with a different lender) but have seen this question on the application form:

"Have you been declined for a mortgage in the last 12 months?" y/n
Value of mortgage:
Reason for decline:

The previous decline was due to a couple of DD bounces. This, combined with the missed payments in the year, and the fact that it was 95%, made it a no.

What impact will this have, if any? Lenders we're looking at are Coventry, and West Brom.

Help appreciated!

chanz4

Answer is yes, if not its mortgage fraud

nubbins

You have to answer yes and I would definately be using a broker in your situation.

daffymoo

We weren't asking *IF* to answer yes, we wouldn't lie on an application form. We wanted to know if it would make a difference to an application, and if so, how.

Thanks.

justcat

I would guess so, and I could only imagine negatively - Unfortunately, I don't know in what way. I assume they don't ask the question for fun.

Is there a reason you aren't looking to use a broker? You might find that you get a better rate as they have knowledge of the market and might know who to place with based on your credit report.

There are quite a few brokers who also don't charge any fees.

Sorry I couldn't be of much help.

Thrugelmir

You say no usage of unauthorised overdrafts, but what about authorised overdraft usage. How much do you owe on unsecured credit?

daffymoo

HP on car is 18 months into a 3 year period, £310/month
Cards, me- £5k total, most on an interest free for 36 months deal
Husband- £3.5k
Lots of "headroom" on accounts.

We are looking to use a broker but won't get to speak to one till early next week and don't want to waste time if there's no point!

daffymoo

Overdraft - a couple of times overdrawn in the 3 months period, no more than say £10 over at a time and then transferred cash from current account straight back into credit the following day once it was noticed. Never over a limit.

Thrugelmir

daffymoo wrote: »

HP on car is 18 months into a 3 year period, £310/month
Cards, me- £5k total, most on an interest free for 36 months deal
Husband- £3.5k
Lots of "headroom" on accounts.

Headroom isn't of interest to lenders. 0% deals are however. As put simply this element of your deposit is borrowed money. Debt and savings do not sit in separate pots. What you actually have in savings is the net of the two.

DpchMd

Thrugelmir wrote: »

Headroom isn't of interest to lenders. 0% deals are however. As put simply this element of your deposit is borrowed money. Debt and savings do not sit in separate pots. What you actually have in savings is the net of the two.

Percentage and value of unused credit, i.e headroom, is of interest to lenders.

Thrugelmir

DpchMd wrote: »

Percentage and value of unused credit, i.e headroom, is of interest to lenders.

For what purpose precisely?