Joint mortgage rejection HELP

johnno83

Hey Everyone

Any advice greatly appreciated...

My gf and I have had an offer of £180k accepted for a new build house. We have a deposit of £20k which comprises of £13k we have both saved and another £7k (a gift from my parents). We went to see HSBC who had the best rates and they agreed an agreement in principle. My gf earns over £40k a year but I only earn £18k basic salary. We did a full application with HSBC, the advisor was very confident we would have the offer processed only for it to be turned down. It was a 'computer says no' answer because the advisor couldn't really offer any explanation as to why? Following this, my gf's father sent a letter of complaint regarding the issue to HSBS because it seemed very strange. Both me and my gf checked our credit file on Noddle and our scores were exactly the same; 5/5 with a score of 632 I think (score differs from Experian) stating ‘very good credit’. When leaving the HSBC meeting I asked the advisor if it was a credit score issue and he said ‘No’.

We were obviously disappointed but went to see a broker. He said he thought he might know why we were rejected; because a large number of lenders will not give loans on new builds without a decent deposit of around 20-25% which we didn’t have (only 10-12%). He found some other deals for us and after taking all our details was very optimistic we could still secure a mortgage. He recommended a deal through Skipton which is currently in the pipeline. We have yet to apply but this is our best option. (The deal is not nearly as good as what HSBC had available)

While this was happening HSBC contacted my gf (she is an advanced HSBC customer) regarding her father’s letter of complaint. They apologized that they were not clear as to why we were rejected and said that it was down to ME being rejected because of my credit file? They could give no details as to why I had failed the credit test just that I had. Furthermore they offered my gf a mortgage in her name only for £153k at a good rate (5yr fixed) provided she could come up with £27k deposit which comprises of my savings as well as hers and a gift from my parents. She said she only had £20k available - so the advisor said (without prejudice) why not transfer £7k from your HSBC credit card to cover this as he knew that in January she would be receiving a £13k gift from her father.

After finding all this out I am truly gutted and confused. I don’t know whether to let her take the mortgage and just contribute half or whether we should just apply for the Skipton mortgage. I’m very worried because of the failed credit file comment that we would be rejected again and eventually run out of options. At the same time I am livid because our scores on Noddle were the same and also the HSBC advisor knew over £10k of the deposit was coming from me! He never mentioned during or after our meeting that I had a bed credit file! It just seems insane?

Sorry for the long sob story but I have no idea what to do? We really want the house but I want to be realistic. If things ever went sour between us I don’t want this to become a huge problem the future. Before being rejected we did all our figures and despite me earning a lot less than her I could still comfortably afford to pay the mortgage and live ok.

If anyone has had a similar issue and any advice then thanks you in advance!

Jack

Malmo

First of all, the scores from any UK agency are irrelevant and not used by any lender and are simply consumer marketing features. The data itself is the important factor, so ignore what the scores say.

Secondly, there are 3 UK consumer-facing credit reference agencies, of which Callcredit (Noddle) is just one. Different companies report to different agencies, depending on their commercial arrangements.

HSBC search Experian, not Callcredit (Skipton on the other hand search Callcredit - they are part of the same group of companies). So ideally, you need to obtain you and your partner's reports from all 3 agencies and see what they all show and identify any issues or errors that may be causing the application rejection.

I am also not sure that doing a transfer of £7K of unsecured debt from the credit card is a smart or advisable step to take.

Pixie5740

Yes, as Malmo says the credit scores given by the credit reference agencies are meaningless. It's what is in your credit files that is important so obtain copies of all 3 of your credit files.

Personally I would go with your broker and Skipton. You have BOTH saved money for the deposit so you should both me on the mortgage and the land registry even if it means paying a slightly higher interest rate.

I find it a bit pathetic that your gf's father (who wasn't applying for this mortgage) threw his toys out of the pram and sent in a letter of complaint because his little princess was denied a mortgage. If you are serious enough to be buying a property together then you don't want daddy dearest interfering.

libf

Can you use Help To Buy to up your deposit?

Jess716

Why not use help to buy?

Also, using 7k off a credit card is more likely to get your mortgage rejected last minute tha anything else as that's a big change in money you owe out. So that will affect affordability, and if it's just your OH on the mortgage then that 7k will definitely make a difference to what they'd lend as it's all based on one person paying it back.

Also don't they associate you on your credit files witg mortgages, from what I was led to believe that could cause a problem with her applying on her own if you've both been recently declined

johnno83

Thanks guys for all your responses

Loving Pixies comment about my future father in law throwing his toys. Thing is he is a financial advisor and was angry we didn't receive any details as to why we were rejected. He doesn't really interfere as such.

There are no help to buy options on this particular property.

A couple of points - the HSBS mortgage has been approved (for my gf) and it was a HSBC advisor who advised her to transfer the credit card balance from a HSBC CC knowing she will recieve £13k in Jan to repay so mortgage won't be rejected on that.

Is it worth me checking all these credit sites now as our house offer has been accepted? Time is of the essence and I couldn't really fix anything now anyway. Should we just go for Skipton and hope for the best?

libf

Help to buy would enable you to increase your deposit without having to use a credit card and could potentially mean that you can both be on the mortgage and deeds. Nasty interest rates if you use a credit card for cash usually too.

When you say the HSBC mortgage is approved... Do you have written confirmation of an offer?

Thrugelmir

johnno83 wrote: »

Loving Pixies comment about my future father in law throwing his toys. Thing is he is a financial advisor and was angry we didn't receive any details as to why we were rejected.

As a financial advisor he should know that lenders don't release commercially sensitive information. I would hazard a guess that you don't earn enough (jointly). As HSBC target certain types of customer.

johnno83

Like I said - no help to buy/ right to buy schemes on this property.

Its an emailed conditional acceptance.

Pixie5740

If you aren't on the mortgage and therefore the deeds you'll be in a vulnerable position if this relationship ever goes down the pooper. Stick with Skipton.

I'm surprised that HSBC would a) allow you to gift money towards the deposit and live in the property b) suggest your gf borrow more of the deposit. Is this a formal offer from HSBC? Not that it matters really as my vote is still your broker'so suggestion...Skipton.

In your shoes I'd still get my 3 credit reports just to check what's on them.

mrsammyp

Sounds like bad advice from HSBC, allowing you to gift money towards the deposit and live in the same property (as Pixie has said) and advising you to do a cash transfer from a credit card of £7k.

Stick with the broker and pay the slightly higher rate, if this means that you get to buy and own the property jointly which you have both saved for.

As others have mentioned, get a copy of your credit report from Experian and Equifax as some companies do not report to all three agencies.