Declined for a mortgage - HELP

faeriesue123

One hundred and fifty one thousand, five hundred pounds.
Not one and a half million pounds!

We have only been on this amount combined for the last year, up until last year we were on a combined of £26000, which is a poor salary when you are living in West London and your rent is over £1000 a month. That is why we got ourselves into debt, we were paying our £140 per month council tax and other bills on credit cards. Since the beginning of July when I decided to leave London as I just couldn't make ends meet, myself and my husband have managed to pay off over 2 grand off of credit cards.

This is why we have been unable to save a deposit.

margaretclare

mr_tickle wrote: »

You've got the figures wrong. It's just over one hundred and fifty thousand pounds.

Thanks for this. I couldn't believe my eyes when I saw it. It helps to put the commas in.

It's still a lorra money, and the same applies - the lenders are getting more cautious with the events of the last week or so.

What happens to a joint income of £44,000 if one or both loses his/her job? And borrowing 100% or 105%? Doesn't anyone remember the events of the early 1990s, when people were going into negative equity and being repossessed?

Margaret

faeriesue123

I do understand that, although if myself and my husband lost our jobs at the moment we would be in the same situation as we rent privately.
The amount we pay in rent would cover what we would have to pay in a mortgage, I am just getting frustrated with paying someone elses mortgage for them.

homer_j_3

faeriesue123 wrote: »

Thanks for the info.

On Friday when A&L declined and Coventry's was passed to the UWs I asked the broker what the next step was if Coventry decline and he said the only other option was to try Northern Rock as A&L, Coventry, and NR are the only 3 mortgage companies that give 100% + mortgages. (We applied for a 105% mortgage)

There are more than those companies that give more than 100% unless they have been withdrawn in last few days (been on jury service so need to catch up on some emails)

Have you heard from coventry today as it only normally takes 24hrs. They will ignore defaults under £250 for certain but if the general picture isn't right everywhere else then they will decline.

Anyway, let us know how you get on

portsmouthali

Good luck with your mortgage application, hope it goes well for you.

My partner & I were in a similar position a couple of years ago, got turned down initially by Halifax for a shared ownership mortgage. The reasons given were the same - we'd been forced to move a lot by landlords selling up, had got into a bit of debt due to earning a pittance, yet were both now earning better money and would be paying about £200 less each month with combined rent/mortgage, than we had been paying in rent. Because we had been lining our landlords pockets we found it almost impossible to save for a deposit. We then tried with Leeds BS, who accepted us :T It's all very nerveracking!

faeriesue123

Well I found out yesterday that Coventry declined us also, for the same reason as A&L.

It's mainly due to the "arrangement" with Smile (one of the co-op banks) that is on my credit report. The report says I owe them £240 and that I have an arrangement with them to pay it back. I called Smile yesterday and they are going to write me a letter confirming that I do not owe them anything, that the account is closed and that I am not in an arrangement with them.

They also asked me to send them a copy of the credit report so they can update eveything, bit I have no idea how long it will take.

Conrad

Sue

As I said yesterday your only option is likely to be 95%. Have you tried BM Solutions? They accept a little adverse credit and can lend over 100%.

Another issue no one seems to have picked up here is affordability. You are asking for a lot in terms of income multiples given a background of some adverse credit.

I hear what you say about the rent as an indication you can afford the similar monthly repayments on a mortgage but this counts for nothing when it comes to mortgages.

Understand the reasons lenders are showing caution is that you failed to keep to the terms of a legaly binding agreement once.

Good luck.

Leon_W

As homer says. There are other lenders at 100%+ but if you've got adverse the chances are (in the present climate) pretty much zero (I'm having trouble with completely "clean" cases). Although saying that, there is one very well known (and used) broker lender (not FN) which has the following criteria.... whether they adhere to it is another matter....

Adverse Credit
The allowable adverse credit limits are listed below.
CCJs / Defaults
1 satisfied CCJ/Default up to £250 in last 2 years
2 satisfied CCJs/Defaults up to £500 in last 2 to 6 years

Mortgage/Rent Arrears
1 month in last year
2 months in the last 3 years

Other Non-Mortgage Arrears
3 months arrears in last year
Arrears occurring greater than 1 year ago ignored

Repossession
Not allowed

Bankruptcy
Discharged more than 6 years ago

IVAs
Satisfied more than 6 years ago


I would have thought that an explanation and a letter from Smile should do the trick in your case but it is obviously a question of how long all this takes to sort out.

faeriesue123

Conrad wrote: »

Another issue no one seems to have picked up here is affordability. You are asking for a lot in terms of income multiples given a background of some adverse credit.

Is less than 4 times salary a lot? I would have thought that was less than normal?

faeriesue123

Conrad wrote: »

Sue

As I said yesterday your only option is likely to be 95%. Have you tried BM Solutions? They accept a little adverse credit and can lend over 100%.

I've just looked on their website and I can only see 95% LTV mortgages