held prisoners in our home by the Co-op, fuming! advice sought

Mortgage_Adviser

The OP's sitiation is exactly why I would never fix my own mortgage for longer than 3 years.
The OP might had no intension whatsoever to move when taking out the fix but 5 years is a way too long period to predict what the future holds for you.

ACG

I just pictured a man from the co-op with a gun at the end of the garden.

What is different between the DIP and the application? Something must be as there would not be a £32k difference.

I occasionally get a no from an underwriter. Once you pick up the phone to them and discuss the case etc, it is very rare that we end up with a difference between a DIP and an offer. Going direct obviously means you can not speak to an underwriter so it becomes a bit of a long winded chain.

splurgegun

Hi, OP here again,

during the DIP process, I said that I had a balance of £5.8K on a long term 0% credit card (until 2020)

In order to increase my affordability, I settled the balance, right there and then, with one hand, while holding the phone talking to the Co-op guy with the other hand. I told him i was doing this and we went ahead with the DIP based on me having a normal spend of around £1k monthly on my Co-op Visa card which is settled in full every month

A week or so later, during the application process, we talk about how the £5.8K balance will likely show up as outstanding because the credit check lags a bit, but no problem, if the underwriter needs proof I can show it has been settled.

The "feeling" of the underwriter is that this previous £5.8k balance is more than likely to recur, and that over time my credit card balance is likely to swell

ACG

So you would have actually been better keeping the £5k balance and putting it towards the deposit...

Co-op and one or 2 other lenders do have a similar outlook on this sort of thing.

Have you thought about throwing in an appeal. Write a letter to the underwriters explaining how you come about having the debt, how you are happy to be in a position to clear it and that you have no intentions of running it up again (assuming you dont).

This is the sort of thing I would do with client to try and get the decision reversed. Have you also looked at extending the term?

haras_nosirrah

to be fair to the coop we get a lot of clients who clear their credit cards with a remortgage - two years later they come back and the credit cards are back and quite often higher than two years previously

Thrugelmir

splurgegun wrote: »

The "feeling" of the underwriter is that this previous £5.8k balance is more than likely to recur, and that over time my credit card balance is likely to swell

Won't be a feeling. Lenders can run an algorithm over the data held on your credit file. From this they'll have a good idea how well manage your money.

I doubt that this is the reason though. The Co-Op bank's financial position is well publicised. Might be that simply didn't want your custom at the current time. With a broad board level decision to reduce exposure to certain market segments.

Fiesto88

I can’t speak for how they are now, but I used to work for co-operative bank until 2014.

When I was there, the DIP was extremely high level and cursory. It was basically, how much do you earn? Multiply by the maximum salary multiple and a soft credit search to check for any major issues.

Quite often, a full application would offer less than the DIP due to stated outgoings exceeding the projected amounts used for the DIP.

Could it be that? As I say, they may have changed to the full DIP model that most lenders use now where the majority of the application data is captured upfront.

kingstreet

If you are 'stoozing' (Mr Lewis' expression for carrying a 0% card balance while you have an equal amount in savings earning you interest) there should be no way a lender 'taxes' your mortgage affordability with that, especially if you are able to demonstrate repayment of that balance at a moment's notice without recourse to your deposit funds or further borrowing.

Any lender who did that to one of our clients would be getting a rocket!

robatwork

Am heading for the Co-op HQ now with pitchfork and flaming torch to try to free you!

Theguywhovapes

When doing the affordability, did you give accurate figures or rough?

I do affordability assessments for a living and the amount of people who 'round off' the figures is annoying because it will cause issues further down the line

Always give accurate figures.