Mortgage Application Advice

priathic

Hi,

New poster here on the forums! I require some advice from people if I can.

In July last year, I applied for an agreement in principle from Nationwide, which came back with a provisional maximum agreement of around £146,000 based on a 5% deposit.

Unfortunately due to the housing market situation in my city, I was unable to find a property and have an offer accepted within the 3 month period. The day after the AIP expired, I applied for a new agreement in principle (as the the estate agents had asked for an in date AIP before viewing further properties).

Nationwide then declined the application, due to a poor credit score. Having checked on my Experian rating (as Nationwide used these), I noticed that my credit score had dropped by 62 points from 744 (fair) to 682 (top end of poor). Nothing has changed in credit report other than the agreement in principle search from Nationwide. I rung up Nationwide to explain this, thinking that they would just offer another agreement in principle. They told me that I was not suitable for a mortgage with them as my credit report had been negatively impacted in the last 6 months (due to their AIP credit search) and try again in about 12 months time.

I then got a decision in principle from NatWest who did not complete a credit check and enabled me to view the roperties required.

Fast Forward to this week, and I'm in a positional where I may be making an offer in an area that is much more likely to get accepted so I decided to check out the mortgage options. I ended up speak to an advisor from a bank, who told me that I was still not suitable for a mortgage with them. Entering into a panic, I decided to speak to mortgage broker (independent) who advised that I would require a 25% deposit or higher before he could see that any mortgage provider would consider accepting me.

I earn around £46,000 per annum and have no debt, but seemingly could not get a mortgage without saving up a much more substantial amount for the deposit. The total value of the mortgage I would be applying for would be £118,750 (£125,000 - 5% deposit).

Does anybody have any advise, or should I do as the bank mortgage adviser and independent broker advised and start trying to save for 25%+ of the deposit?

Many Thanks

Martin

ashp_2

That seems weird. Have you looked at your credit reports?

You are well within maximum borrowing limits and with no debts there should not be any affordibilty issues.

I would check all 3 of your credit reports as I suspect there must be something causing an issue within 1 of your reports.

priathic

thanks for the quick reply,

I had a check and about 3 years ago I cleared off an old outstanding debt of £271 to Lowell after a mobile phone company claimed I hadn't cancelled a contract (which I did, but that's a different matter). I agreed to pay it off, just to get them off my case, but my credit rating dropped down to 744 after paying this (it was about 850 beforehand).

That is the only negative listed on my credit reports, they all say £0 credit outstanding and many thousands available credit.

Could having cleared a debt to debt collector have caused this problem... if so is there anything I can do about it?

ashp_2

So you have a default. Paying it would not have been the issue. I would imagine once the debt was passed to Lowell they put the default on your report. You should check the default date is correct.

You will certainly need a mortgage broker and a higher deposit than you currently have.

ACG

Find another broker, I see no reason why you can not get a mortgage at normal rates, the only potential issue is whether you will pass a credit check at 95% LTV but without seeing your credit reports its difficult to say.

Get your equifax/experian and noddle reports infront of a good, experienced broker and I am fairly sure there will be options.

priathic

Thanks for the reply also,

I have spoken to another broker who has preliminary said that there should be solutions, especially if I can go to 10% LTV, which is fine for me to do now. I have a face-to-face with them next week, so hopefully all will go well

ACG

I think with a 10% deposit (presumably not 10% LTV) you will be fine. I would be relatively confident you can get it through at that LTV.