Mortgage Application Rejected - What Next ?

MeMeJo

Hi,

Looking for some advice. Recently went to obtain a mortgage for a property I found - £150,000. First time going through the process. Looking to do 10% deposit over 15 years. This is a single person mortgage.

Credit score is around the 850 mark. I work full time earning approx £60k a year (not including bonus and overtime). Been working at the same job for about 3 years. (been in full time work since i left uni)

The only thing that could go against me, was during University i was a little lax with my credit card bills and defaulted on one. but this was about 5 years ago now!
Right now i am paying off my credit cards in chunks, and only have 1 CC left with under 10k on there. Im on the electoral register.

Can someone please explain why they think i was rejected. Should i try with another bank or building society. I dont really want to be waiting x years for that default payment to be removed from my credit score.

any advice would be great.

kingstreet

What was the reason given for the decline and which lender are we talking about?

MeMeJo

was the bad payment years ago and it was principality

kingstreet

Ok, so you were declined due to historic adverse credit which, although five years ago remains visible on your credit file fr six years from the date of registration.

Principality would not have been my first choice of lender for this, nor second, nor third...

I can think of more obvious options, but if you went direct I would suggest you establish your options with an independent broker. If you did use a broker, ask them why they thought Principality was a good idea;-

The Society will not consider a mortgage application where one or more applicant is considered to be credit impaired under MMR rules:

• Has been the subject of one or more County Court Judgments or Defaults, with a total value greater than £500 within the last 3 years OR one or more County Court Judgments or Defaults, with a total value greater than £1000 within the last 3 to 6 years.

So, if your default was more than £1,000 it simply being visible made it an automatic decline and no flexibility is going to be shown on a 90% application. See page 3;-

http://www.principality.co.uk/~/media/PBS-Intermediaries/PDFs/MLCA4-09161.pdf

David_White

First off, don't panic.

From what you've said I've no doubt there will be other lenders that will approve your case you just need to either spend the time researching lenders yourself or enlist the help of a broker who will know where to place you.

ap1985

I was initially rejected for a mortgage by a Lender...this was due to defaults on my credit file and a CCJ. However, I then went through a broker and got a mortgage offer. Don't get yourself down as this isn't the end of the world! I would highly recommend using a broker though.

Thrugelmir

MeMeJo wrote: »

Right now i am paying off my credit cards in chunks, and only have 1 CC left with under 10k on there. Im on the electoral register.

Did you enter a DMP or agree a repayment plan with your creditors?

Appears as if much of your (10%) deposit is borrowed. Why haven't you settled your debts quicker.

Westminster

Not sure if they will be suitable but have a look at the lending criteria for Barclays.

At the time, we had a much bigger deposit but did have 1 adverse account roughly the same age as yours.

norm_

60K salary, surely you can muster more than a 10% deposit ...