What now

andys15

Hi. Through my broker we had a mortgage agreed in principle with TSB. We got the valuation we needed and the paperwork had been sent to the solicitors. I got an email from solicitors this morning as the broker had my middle name of Steven spelt with a ph. I spoke to TSB and they ran it through a credit check with my real middle name and we failed. Our income is 97k( mine)and 51k with a bonus every year iof 7k( wife's). My mortgage is 180 k. We were valued at 325k by legal and general and we know for a fact that our house renovations have added 40k as the exact same house as ours sold last week in a day for full asking price. We have a lot of debt which is more than manageable on our salary. The debt was all taken for house improvements. Extension, kitchen, garage conversion, garden, interior walls knocked down etc etc. The debt totals 70k, which we were putting on the mortgage, and taking out more equity to do the bathrooms, boiler, another change to interior walls. Overall we wanted a mortgage of 260k with a 80% LTV. This was going to be spread over 9 years, with s mortgage of £2750. This leaves us after everything comes out of over 4k a month. Why are we struggling. I wish I would have put the previous house renovations on the house instead of loans and cc but we didn't realise we had so much equity. I am not prepared to go off high street and will just keep everything as it is, if we cannot do anything. I should have repaid my loans quicker really instead of taking my mortgage term from 23 years to 10 years last year, but i wanted to rid the mortgage for added security.

Thrugelmir

£70k of debt. Yet only £40k of value added to the property. Lenders will be wary in light of the recent MMR regulations.

Speak to a broker for guidance as to a suitable lender.

A fast solution would be a second charge secured loan. This would at least enable you to normalise the situation and reduce the amount of interest you are currently paying.

andys15

I didn't do the work and expect it to all be added to the value of the house. We have probably reached the limit of what the house can go for.
i don't pay an awful lot of interest. We are in no way struggling. Infact quite the opposite. I could throw a load of money at the debt, but I don't want to. I am happy most of them going the full term. I just cannot understand with our joint income and trying to secure a mortgage of less than 2 times our joint income I am struggling. Then I read in here about people getting mortgages with dmp and IVA etd etc. I might just not pay any debt and have them scrubbed and try again in 3 years when they have left my credit file. ( not really.but it does make me mad).

cakeforbrains

andys15 wrote: »

I didn't do the work and expect it to all be added to the value of the house. We have probably reached the limit of what the house can go for.
i don't pay an awful lot of interest. We are in no way struggling. Infact quite the opposite. I could throw a load of money at the debt, but I don't want to. I am happy most of them going the full term. I just cannot understand with our joint income and trying to secure a mortgage of less than 2 times our joint income I am struggling. Then I read in here about people getting mortgages with dmp and IVA etd etc. I might just not pay any debt and have them scrubbed and try again in 3 years when they have left my credit file. ( not really.but it does make me mad).

Don't you want to save money by paying your debts off sooner?

I know you're joking, but if you did default the companies would chase you until they got a CCJ which would take a further 6 years to fall off your credit file.

It sounds like your debt to to income ratio is about 1:2. We 'only' have a household income of about £60k, but we wouldn't expect to get a mortgage if we had £30k of debt. Not even a little one.

All that said, I do hope you manage to sort it out.

andys15

Cake. Not really. The interest is hardly anything spread over the term. The debt would have been added to the house, therefore we would have no debt. Over the whole term of the mortgage we would have only paid 30k in interest. That's what I am gutted about. My broker says I would struggle to get a mortgage for £180k in order to get a fixed rate deal. I am currently on 1.49 above BOE rate. I did worse case want a good fixed rate. Ah well only got 9 years to go on mortgage.

andys15

The interest rates are all below 4%. Credit cards are all 0%.

kingstreet

Presumably your broker is finding an alternative?

Did he/you obtain copies of your credit files prior to applying to a lender?

Would TSB not lend to you at all, or at a restricted loan to value, say 65%?

andys15

Broker said we now won't get high street. So not interested in any other option.

kingstreet

If you don't mind me being a little blunt, what was the point of your thread if your response is going to be so dismissive?

You need to investigate this further, even if you don't want to look at other options.

You may have something on your credit file requiring attention which has affected you if something as inconsequential as a single letter takes you from an accept to a decline.

You need to obtain all three versions of the credit file for each of you and ensure the information is 100% correct before you do anything else.

How can your broker confidently state you have no other high street options, unless they already knew you had an issue which meant TSB was your only option?

Malmo

OP, sound advice from Kingstreet.

There is no need to sign up for the Credit Reference Agencies monthly subscription services - the scores they generate are irrelevant to lenders and not visible to anyone except you and the credit reference agency.

See links below to each agency's statutory report, which are all you need.

Experian Statutory Report

Equifax Statutory Report

Callcredit Statutory Report AKA free monthly service Noddle

Check that your current, previous and linked addresses are correct, that you're both on the electoral register (this is a UK legal requirement anyway), that any financial associations derived from joint credit accounts are correct or have them disassociated if incorrect. Check that any adverse markers such as late or missed payments, defaults, CCJs, arrangements to pay etc are factually correct and if in error, raise disputes with the source and the credit reference agency.

Then make sure you provide all the reports to the broker (assuming they are independent and whole of market).

andys15

My broker is saying we have too much debt, although it's all going in the mortgage.