Mortgage application - not denied.... needs 'restructure'

chromac

Hola mis amigo's

My broker is MIA today - but just a quickie for those of you in the know:

My mortgage to TSB got turned around - specifically because they are not happy with the amount of incentives we are being given by the builder - does this mean that in theory, they are happy with everything else?

I know answers will be mainly conjecture - BUT I've been freaking out about my poor credit history (late payments 15 months ago - and a £99 default 2yrs+ ago) so I'm hoping that the fact they have said 'do this and this and come back' is a good sign? Or is this a step they undertake before sifting through my credit history.

Cheers ladies and gentlemen. :beer:

kingstreet

What is the level of incentives?

Is this an HTB Equity Loan case and what is your deposit in % terms?

chromac

Level of incentives & mortgage can't exceed 95% of the value of 80% of the house, as I am using a 20% equity loan.

Value of the house has £325k and we need 6% deposit to bring us in on affordability. We negotiated 4.5% of the value for incentives to cover the stamp and also put towards the deposit to make the extra as we only had the 5% originally.

But according to the limits, we can only use about £6,500.

kingstreet

Yep. You've answered as I expected.

TSB and Halifax both restrict incentives to 1% of the purchase price where the HTB Equity Loan scheme is being used and only 5% deposit is being used.

You need to reduce the incentives, increase the deposit or change lenders.

chromac

Indeed, by the other part of my question is about the credit checks, by all accounts I don't have a spotless credit history. The fact that they came back and said restructure makes me hopeful that I have indeed passed the credit side of things, and they will accepts the restructure that now complies with their rules.

Do they typically do they typically study through credit history first or last?

Thanks for your input so far.

kingstreet

A hard search is done at full application submission.

You cannot reach this point until the incentives are input at an acceptable level. Until then a "corrective action" message prevents proceeding.

chromac

So upon checking my report, they did do a hard check, which is dated the day after we submitted the app - but they had already turned it around by then. I suppose it's just a case of doing what they say and seeing what happens. I wish there was such thing as a crystal ball.