Mortgage application - credit card debt

liz09

20% deposit is £170k on the property we're purchasing. We're lucky that our salaries our high (well in excess of £100k per year). I feel that our joint debt is low in proportion to our joint earnings.

I have now heard that the mortgage company now are saying they won't lend 80% but will lend 64%. This is a massive 260k less than they said they would lend us on the offer in principle (which was actually made on the basis of us buying a much more expensive house than we now are). It is also £140k short of what we really need for this property.

The reason given is credit score, so I can only think it's debt. I've checked Noddle and they have recorded that I have 20k more debt than I have (recently paid debt). They also have a credit card open that I shut over a year ago. Could this really be causing such a vast lend amount difference?

I'm tearing my hair out here

kingstreet

Your broker needs to submit precise details;-

debt which is not going to be repaid

debt which will be repaid on or before completion

debt which has recently been repaid

the latter should be included in the "to be repaid" column as often there is a time lag between something being repaid and it becoming visible as repaid on your credit file.

We can't know what has been entered in what column, so are unable to speculate on the reason for the outcome.

If you are given a credit score ceiling this will usually be a LTV band, so 65%, 70% etc. If you get an odd numbered maximum loan, this is usually due to affordability - ie the impact the debt is having on your maximum borrowing power.

BTW a couple of lenders will still treat repaid credit as if it's still there if it wasn't paid off months ago. They assume it will be re-drawn later, so factor it into affordability.

liz09

Thanks for all the help. I think I have sent him everything you suggest now

I hope we can resolve the situation. It's a bit unfortunate that he told me we had it agreed in principle (underwriter approval he said), but obviously without the debt being factored in (he had an exact list of all debts I actively had with a very slight change in the wait for application). However he didn't have an exact list of recently paid off debts, I told him the total amount (£) I'd paid off in the last 3 months, so I would have thought it should have raised at least a question to me to give him more details if he required them.

I've checked equifax now who metro bank use and note that they did a soft search yesterday but haven't done a previous search around the time when he said he'd had it agreed. Would that suggest he didn't get it agreed, when he said we did?

I'm 6 months pregnant, haven't slept a wink for nights and obviously extremely stressed about this. He's taken 6 weeks from us offering on the property to even submit the application. Today he's asked for more details and p60s, you'd have thought in those 6 weeks we could have dealt with that!

I really think after all this I should complain, or am I being completely unreasonable about this?!

amnblog

Complain to whom, who does he work for?