Refused a mortgage because of childcare costs

VacheEspanol

Hello I'm hoping that someone might be able to give me some advice.

We recently applied for a mortgage through a broker - which has been refused - primarily based on our childcare costs.

But our application has been refused - despite a high credit rating of 979 (experian) and 480 (equifax). I know credit rating isn't everything but trying to give some context.

Our salaries and multiples were absolutely fine - and have a 15% deposit.

We also have a small loan - under £5k and spend on credit card (mix of clearing balance for spending and paying a fixed amount each month on 0% cards - this about £1.5k) - and using less than 80% of the credit available to us.

We've put in an appeal - but its unlikely to be successful.

So what do we do next? Our childcare costs are likely to reduce over the next year. If we move and rent somewhere in our preferred area how much will this affect our rating/ likelihood of being approved as we won't have been on the electoral roll for very long. It's likely that we will move because of schools etc...

How badly will having a refusal on our files affect us?

Do we need to wait six months, a year or longer before trying again...

Are there any other options open to us?

Tixy

A single credit application search on your credit file won't have much impact at all on how future lenders assess your credit file. It won't show that you were refused.

For a future mortgage application I doubt that a relatively recent change of rented address will be a major concern either. You'll still have your past electoral roll history visible on file as well as the new time at the new property.

Has your broker given an opinion, perhaps suggested any other lender who may have a more flexible approach at considering your afforability and outgoings?

In terms of when you consider applying again, as it appears to be an affordability issue (from a lender's point of view) then I guess ideally I'd wait until something changes so that your affordability looks better.
That might be reduced childcare, it could be reduced other outgoings or unsecured debts, or might be trying to borrow a lower amount etc.

VacheEspanol

Thanks for your reply. Its good to know that the refusal won't have much impact and that moving rental properties shouldn't either.

With the childcare costs - we spoke to the broker at the beginning of process and said that we could reduce them e.g. grandparents, change working days etc...but he didn't seem to think that it would make a massive difference so we didn't. Apparently there are only a few lenders that don't take childcare costs in to account. And thats why we'd gone to the lender that we had.

I can reduce the childcare costs. With free hours due to kick and I can change working days/ grandparents etc...I reckon I could reduce by just under 50% - in September. But the broker seems to be saying that it won't make much difference.

We can reduce other unsecured debts but it would leave us with less of a deposit and the brokers advice was to keep the deposit at 15% rather than clear the debts. Perhaps we should revisit this now.

susanthunt

Personally, I think I would try another broker - or see. Lender direct for advice.