Can't get loan because of rental agreement

stereo_world

Hi,

Hope you can help us, because we're stuck in a bit of a pickle. We're both in secure full time work which gives us a nice combined income - above average for our age. We're also renting.

My wife is trying to get a loan to consolidate some historical debt so we can go ahead and start saving properly for a mortgage. She spoke to NatWest who she banks with, who gave her a *really* competitive rate that's perfect for our situation.

However, they can't offer the loan because of the rental agreement we're in. Despite us both paying equally to the rent - as far as the bank is concerned they consider her as being solely responsible for the whole amount in their eligibility criteria.

I contacted our letting agent today and we were told (by some snot nosed jobsworth no less) that we cannot take her off the agreement because she's living there. Now I don't know if this is just the company policy or it's just general tenancy law.

She's distraught because she's so close to finally getting this sorted.

Note: If anyone's ever had to deal with Entwistle Green, you'll know my pain. That's by the by though.

Surely this is a common occurance - people might be renting because they're in debt but need a loan?

Are we within our rights to do this, or this just one letting agent's policy?

What other avenues can we take if this isn't possible?

Thanks for your help
Tom

HappyMJ

Most letting agents and landlords require all adult occupiers to be named on the tenancy agreement.

You could if you wanted to hand in your notice to end the tenancy then find somewhere else to live on your own then ask if your wife can be a permitted occupier. Your wife would then not be responsible for the rent.

molerat

The letting agency will not take her off the tenancy as she is living there and they can hold you both liable for the tenancy and any breaches so why would they.

It is the debt and the bank's affordability criteria that is the problem.

glentoran99

Could she put down your contribution as income to her?


Or maybe you could apply for a joint loan?


Or maybe there is another way to tackle the debt? Consolidation isn't generally recommended, Instead of Condolidating and then saving at the same time (which I presume is your plan) pay as much as you can off the debt,


What sort of amount and interest rates are you talking?

DCFC79

Look at the spending and cut back, shop at the discounters, take packed lunch to work, no unnecessary buys.

stereo_world

Thanks for your help so far. Can't complain if it's within the rights of the letting agent to deny us this.

We're talking roughly £15k. Unsure of the interest rates really, but we were offered a plan over 6 years at a smaller rate than what she's paying back currently. The extra wiggle room means she can save for a more comfortable maternity leave when the time comes (we're planning to, she's not pregnant yet).

I agree consolidation might not be the best course of action, but it seemed like the rate natwest offered us would make it so much more manageable in the long run.

We'll definitely explore the idea of paying this off the good old way - hard graft.

Thanks again

AnotherJoe

When you say the loan will allow you to start saving how does that work?
You'll still have a loan and it will still count against you when you apply for a mortgage
As For the "snot nosed agent" even a just about to be retired bewhiskered old fogey agent would have told you the same. Don't lay your personal issues off on someone else it's not the agency that's responsible for the debts and the best way of saving for a mortgage will be to get rid of those debts as fast as you can.

That might be with a consolidation loan if the APR is substantially lower than the loans it replaces but that should be used as a way of paying off the loan quicker not extending it which is the gist of your post.

If you want to have a kid and a mortgage getting your finances in order should be first priority which means a harsh look at your spending

[Deleted User]

AnotherJoe wrote: »

When you say the loan will allow you to start saving how does that work?

Yeah, I find that peculiar logic. Unless the consolidation loan is set at an interest rate considerably less than the existing debts, I'd say this idea was unwise. Instead of "saving", OP should put that money to work paying off the debts.

I also think, regardless of the rental agreement, the OP doesn't meet the bank's affordability criteria and that's the end of it.

redpete

stereo_world wrote: »

(by some snot nosed jobsworth no less)

I guess you didn't enrich their day either.

Voyager2002

Speaking as a landlord, I would NOT want anyone living in my property without a tenancy agreement. That situation could cause all manner of legal problems. If an agent were to agree to such a thing I would be extremely angry. In conclusion, your letting agency acted correctly.

As posted above, you would be more likely to be treated fairly by a lender if you were to apply jointly. Do be aware that doing so would mean that your credit histories would be linked, so any credit problems that she might have had in the past would count against you if you applied for any financial problems.

I am also a little concerned that you didn't seem to know whether the interest rate on the loan was lower than what she is currently being charged. Unless the consolidation loan is at a significantly lower rate than the existing debt there is really no point in doing something like this.

Smedders11

Consolidating debt could help them save more by lowering the interest rate they're paying, and giving them more money to put towards a deposit.

Although I'd take the opportunity to use the difference to overpay the debt.