Refused Mortgage at DIP stage

scrivs156

Hi all,

Newbie to the forum and after some advice.

Today myself and partner had a meeting at a bank to attempt to get a mortgage.

About us, 24 and 27 currently renting.
I have 2 jobs with Fire & Rescue Service, one fulltime on a fixed-term contract (extended twice expected to be permanent) earning approx £22k a year, plus retained firefighter (permanent contract) earning upwards of £4k per year.

My partner is full time IT Engineer earning £26k (first month in this job, previously on £21,500 in another IT role)

We did the mortgage calculator with the lovely lady in the bank and it came out they would lend us £215,000 with the £30k deposit we have. (£235k with 0 outstanding debt) over 32-35 years.

We both have combined debt on credit/store cards of approx £5000.

We keep up regular payments with my credit cards, my partner does also but had a rough time in the past where some payments were late. I am also a culprit of missing my phone bill payment recently due to them enforcing a change of direct debit day (to which I cancelled the direct debit and pay monthly by calling them). In the past my partner has regularly used some payday loan websites.

We were refused the DIP. The lady from the bank obtained feedback from our Experian report saying there is no adverse credit showing, it may be down to having high credit limits on our credit cards that we no longer use and that my partner is only in the first month of his new job.

Both our experian credit scores are fair 700 points +

What do you guys make of this?

Sorry to have gone on a bit! I hope someone will be able to give us some advice.

ADChick

Affordability sounds like it should be fine, I'd say it's info on your credit score.

Missed payments is always going to cause an issue. If it's a genuine one-off error then you might get a way with it, but continuous late payments doesn't look good.

Also I know some lenders will just flat out refuse any with payday loans showing. "Regular" use will definitely put a lot of lenders off.

Might be worth speaking to a broker as the above would be enough to put a lot of high street lenders off.

Debtslayer

You need to contact an Independant mortgage broker; they will know who is most likely to accept you or advise if you need to wait a few months and/ or what the problems are
Could very well be that your partners only just started new job and missed payments and payday loans are really not a good idea.
So consult a broker; they will have handled cases like yours before

WorriedFTB_2

Try with a broker .
But from reading 700 score is "fair/good" so there may more to look at in the credits records. You may be able to fix , look at in detail.

The high limit on cc wouldn't affect your application if it at 0 balance ! It would actually be a positive as used revolving money .


Good luck !

amnblog

Your 'lovely lady' at the Bank is armed with a limited set of tools to assist you.

As stated above you need your case considered by someone with the right tools to do the job - an independent broker.

Thrugelmir

What's the source of the deposit. Repaying your debts would be a step forward.

How recent was the payday usage?

scrivs156

Thrugelmir wrote: »

What's the source of the deposit. Repaying your debts would be a step forward.

How recent was the payday usage?

The deposit is as a gift from both our parents. We've been working hard to pay off the debt.

The payday loan was probably 5-6 months ago, with 2 or 3 used last year.

Thank you everyone for your replies, we shall seek to speak with an independent mortgage broker. Thank you.

Barpeeler

I'd say payday loans are the problem

Get independent advice from a local advisor!

Tiddlywinks

The problem is that you have been spending 100% of your income and haven't managed to save anything - that's not a good start.

Add to that the fact that your partner has recently used payday loans multiple times - you both need to maybe take some time out to set yourselves the challenge of managing your budget BEFORE taking on a mortgage.

This delay - if you regularly save - will demonstrate to lenders that you now have control of your spending and will be able to cover unexpected issues like broken boiler, car breakdown etc.

At the moment you appear to be at your limit budget wise which is not an attractive prospect for lenders.