Declined for decisions in principle with some but not all

SMM2018

Hi there,

I have had an offer accepted on a house which I hope to move into shortly. In order to prove my finances I have applied for a decision in principle with my main bank account provider (they are not competitive and I don't wish to proceed with them).

I have since found the deal I want with another bank (I also have an account with) and they have declined me without giving a reason.

A little about me:
- I have no credit searches on my file in the past year
- I have no bankruptcy, CCJ's or any other history of adverse credit history
- I have no outstanding loans or credit agreements beyond repaying my student loan
- I have 2 credit cards, I don't use one and I repay the full amount on the other each month. I use less that 10% of my credit limit in total
- I am applying for a mortgage less than 3x my annual salary
- I am permanently employed and have been with the same company for 4 years
- The mortgage repayments I am applying for are equivalent to my existing rent (which leaves me a surplus disposable income of over £500 per month after all expenses have been paid)
- The mortgage term I am applying for would end 10 years before my planned retirement age
- I am on the electoral register and have been at my current address for 2 years (have provided address history for the past 3 years)

I can't understand why I am being declined. It is especially frustrating as the ;lenders are not giving me any feedback.

Any ideas or suggestions would be greatly appreciated
Thanks

Thrugelmir

SMM2018 wrote: »

I can't understand why I am being declined. It is especially frustrating as the ;lenders are not giving me any feedback.

Who is the lender in question.

SMM2018

HSBC said an outright no. Another lender (Barclays) said yes but only for 2.5 x my salary which seems really low considering I don't have any outstanding credit.

YHM

Why don't you use a broker and let them find a suitable lender instead of damaging your credit profile by applying willy nilly?

ACG

Stop doing DIPs. Most of them involve a credit check so every time you do it, you are potentially hammering your credit score. 1 or 2 should not be the end of the world, but beyond that and you are causing yourself more problems.

Have you asked the lenders why they have declined you?
Have you checked your credit reports? (You can get them from equifax and experian).
Have you spoken to a broker?

Rich2808

ACG wrote: »

Stop doing DIPs. Most of them involve a credit check so every time you do it, you are potentially hammering your credit score. 1 or 2 should not be the end of the world, but beyond that and you are causing yourself more problems.

Have you asked the lenders why they have declined you?
Have you checked your credit reports? (You can get them from equifax and experian).
Have you spoken to a broker?

Actually most of the leading banks only so a soft check AIP/DIP - so there is no impact on your credit score. This includes Barclays and HSBC as well as TSB, Halifax, Natwest and others.

Nationwide and Yorkshire BS by contrast do a hard search - which would appear on your file. But in reality only the hard search ones mean much anyway.

An AIP is just intended to be a guide to what you could afford - but as has been said best use a broker as they can find the right mortgage for your circumstances.

ACG

I did not realise that many did soft footprints. It must differ a lot between the customer and intermediary market.

I dont know why people bother with soft footprint credit checks, the amount of times we see on here where they were agreed then declined at full application is ridiculous. Although I suppose in this instance the person is a little better off than had they done 3 hard footprint credit checks.

SMM2018

I have approached 3 different brokers and have found that none of them were able to find a better deal than my own research has found. Having had a mortgage before (I used to jointly own a house) I am fairly comfortable in making an application and sorting out the paperwork myself and figured if they can't find a better deal I may as well save the broker fee which is typically £500.

I had assumed finding the house would be the hard part not getting a mortgage as I have never ever had any issues getting credit in the past. Typically I have been offered more than I have asked for and always got the advertised rate.

SMM2018

Have you asked the lenders why they have declined you?
Have you checked your credit reports? (You can get them from equifax and experian).
Have you spoken to a broker?

I asked HSBC and they said that I don't meet their internal lending criteria but they couldn't tell me why which is really unhelpful.

I have access to all my credit reports with all the different credit reference agencies and there is nothing of concern on there; all info is accurate, no CCJs, no bankrupcies, no late payements, good level of credit granted (low usage of available credit), on the electoral register, scores all in the good - excellent range and plenty of current or closed accounts to show a history of being a reliable payer.

Yes I have spoken to three different brokers and not one of them flagged anything that would be of concern in terms of my income/ outgoings or circumstances. I am genuinely flummoxed.

ACG

I am not here to bang the broker drum, I completely see your point - why spend £500 if you do not need to.

But the deal you have found you are not eligible for. Any idiot (and im not calling you an idiot) can find the cheapest rate. The issue is getting the Mortgage. If one lender has declined you and another reduced maximum lending it seems there is some issue, it could be overall score - you say barclays limited you to 2.5x your income, is that a percentage of the purchase price by any chance? It could be they want to limit their risk on you to say 60% LTV?

There is clearly a problem somewhere down the line, a broker will give you a bit of a generic answer until you sit down and complete a factfind with the, give them your credit reports and bank statements etc. Then they can go off and do the research properly.

I suppose you have 2 choices, go with your bank and hope it sorts itself out in 2 years time or whenever the deal you apply for finishes. Spend the money, speak to a broker and see what they can find you that you are eligible for. You may find going with your bank is the better of the 2, but I do not think we are going to be able to help you get to the bottom of it without a lot more information.

System

Smm2018 -

. - The mortgage repayments I am applying for are equivalent to my existing rent (which leaves me a surplus disposable income of over £500 per month after all expenses have been paid)

This might be not enough. You have to be able to weather a 3% rise in interest rates I believe, which in many cases would approximately double your monthly payment. If this increases your monthly payment by more than £500 a month, you'll be in trouble