Business Expenses and Declined Mortgage

soundofsilence

Hi,

I am a first time buyer and have had my mortgage application turned down due to paying for business expenses (I am employed) on my credit card. With hindsight this was a bad idea but obviously this was only an issue when I applied for a mortgage :eek: This is how the conversation went:

Q: How many credit cards do you have?
A: Two cards, one of which I don't use
Q: On the credit card you do use, what was the highest balance within the last month?
A: £2000, this is mostly work expenses

I have paid off and cancelled the card so based on the above line of questioning I would pass the test. The mortgage lender told me that if this number were £300, what I might actually spend on my credit card in a month, then the mortgage would go through no problem.

The obvious answer is to go to another lender but this lender seems to be more generous than any other lender and I have had an offer on a property accepted based on having the Mortgage in Principle offered by this lender. In other words the simplest solution by far would be if I could persuade this lender to reverse their decision.

Does anyone have any suggestions to resolve this issue? Is there any regulation that says a mortgage lender can't include business expenses in their calculations? Their argument was that I am ultimately liable for the card being paid off. The whole thing seems ridiculous because if I had paid off the card the day before they would not have declined my application.

Any suggestions much appreciated and will happily purchase -> :beer: as repayment

kingstreet

So you pay off this card balance in full every month?

Which lender was this?

Thrugelmir

soundofsilence wrote: »

A: £2000, this is mostly work expenses

Do you incur £2k a month in work expenses?

amnblog

The joys of applying direct to Lender.

csgohan4

did you not tell them you pay your credit card balance in full every month?

soundofsilence

Thank you guys for your responses!

kingstreet wrote: »

So you pay off this card balance in full every month?

Yes, I pay the card in full every month, in fact the full amount to pay is usually £300.

Thrugelmir wrote: »

Do you incur £2k a month in work expenses?

Yes, I think about £1700 is work expenses plus £300 personal expenses. In fact this is the first time I have used my credit card that much. Remember the highest balance within the last month will include two months' worth of spending, although in my case around £300 from the previous month of personal expenses plus £1700 of business expenses.

csgohan4 wrote: »

did you not tell them you pay your credit card balance in full every month?

Which lender was this?

Yes, I told them I pay in full every month. The lender is Halifax.

soundofsilence

amnblog wrote: »

The joys of applying direct to Lender.

Hi Amnblog, I have spoken to a mortgage advisor and the route I have taken was recommended to me by the advisor.

Do you have any suggestions?

amnblog

Did the adviser handle the application or did you take the advice then apply direct?

soundofsilence

amnblog wrote: »

Did the adviser handle the application or did you take the advice then apply direct?

No, I applied directly after discussing with an advisor.

amnblog

You won't want to here this, but I would not expect this problem to have happened if you had given the broker your business.

Why you went direct I can't fathom.

I recommend you go back to the broker, 'fess up, and see if they can get you out of this mess.

soundofsilence

amnblog wrote: »

You won't want to here this, but I would not expect this problem to have happened if you had given the broker your business.

Why you went direct I can't fathom.

I recommend you go back to the broker, 'fess up, and see if they can get you out of this mess.

Thanks for your advice. Could I ask how you would you resolve the mess as a mortgage advisor?

I should point out I simultaneously used a mortgage advisor, who conducted an assessment ten days ago. He missed two appointments to call me and I have since left multiple calls and emails trying to get him to provide recommendations without any success.