Declined Nationwide Mortgage...Can This Be Right?

Kweedan

Hi All,

I seem to be having absolutely no luck with my house buying process

We went to buy a property in January (purchase price £132,000 deposit £26,400) and we went directly through Nationwide. We thought this was the best thing to do as my partner banks with them and we opened up a joint account with them just before applying with the intention of paying our mortgage/household bills through there.

This mortgage offer went through and was accepted absolutely fine, they gave us the full amount and was no issues with deposit/other documents, apart from I had a bit of inheritance that I was using, and they wanted to know where I had got it from.

That house fell through, so we have found another one. This is at £162,000 with a £34,000 deposit, using savings we had between January and April and some we had left over last time.

The surveyor went in and found lots of problems (that we already knew about when we bought it) and Nationwide decided that they wouldn't lend us the full amount we were asking for (£128,000), however we were told over the phone and by our in branch advisor when he got involved that this was the only thing affecting our application and our affordability was absolutely fine and already ticked off. Okay fine, we went back to the estate agent and the vendor to start renegotiating.

However, I get an e-mail out of the blue from the Nationwide yesterday to say that our mortgage application has been declined as it 'has failed credit score'.

I ring the call centre for their mortgages and I was told by somebody that a senior underwriter went in to our file yesterday, looked at our credit file, and denied it based on that. They wouldn't tell me anything at all, what they found, who they found it about, and why they didn't find it before. I also believe the only reason they did it again was because it went back to the underwriters due to the bad survey - it hadn't been touched for over a week (says online that our documents were 'satisfactory' on 12.04.2018) and leading up to that our online progress says 'Decision in Principle - Accept' 4 other times.

I have absolutely no idea what they found at all. Both me and my partner have perfect records, we are both first time buyers with good credit scores, he has a credit card which he pays off every month, and we both have phone contracts, we both have no faults or late payments. The only reason my credit score would be going down would be because they keep credit checking me!! Absolutely nothing has changed between now and back in February when they accepted the first mortgage offer we did.

I spoke to our mortgage advisor just as he was finishing for the day yesterday afternoon, he is just as surprised as we are, and he is going to get in touch with the underwriters tomorrow (he does not work Thursdays) to see if he can find out anything for us, and see if we have any rights or ground to appeal.

I was just wondering if this seems right for our situation, and what they possibly could have found now that wasn't there last week when I was told that we were good to go, and all the other times they checked on us leading up to this.

Also, if this does go to pot and we do get shut down, how long would be right before we go back out there and try yet again?

And also, is there anything I can do to make sure this does not happen again? We will definitely be going to a broker next time.

Thanks

kingstreet

Obtain all three versions of your credit file and establish what is visible to lenders in each case.

Kweedan

kingstreet - Thank you for this.

I have tried to do this a few times.

With Experian, I signed up to it previously, however it tells me my credit score is 995 / 999, and does not tell me anything at all about why, or what is on there.

Equifax I follow my ClearScore account really closely, and it always has everything on there. Its got my address on the Electoral Role and always has done, my phone bill, my new joint account with the overdraft, and it shows both of my Nationwide DIPs (The first one didn't bother it that much, but it really did not like the second one, my score dropped 80 points.) Apart from those things there is absolutely nothing on it that suggests it is bad.

For CallCredit, I have a Noddle account, however it just tells me I do not have enough history to have a report with them, which I am not sure if completely correct?

Not sure if I have done everything I can

Thank you

[Deleted User]

Stop looking at your credit scores. None of them have any relevance.

You need to get copies of your reports to look at the data only. You can get your Experian one via the MSE Credit Club.

Kweedan

Hi zx81 - Thank you for your advice.

I always try not to look at the numbers, but always assume that they are representing how lenders will see me, and I thought 80 points is really big and will look really bad.

I have done as you said and had a look at my report. It says my credit score is 'excellent' and I have no court data or missed payments as I already mentioned, and even though I have done two hard searches for my mortgage applications in the last 6 months it says i have made a small amount of credit applications.

The only thing it really says is that I do not have enough debt or credit for the amount that I earn, and the small amount of credit which I do have (phone bill and 1,200 overdraft on joint account) is not very old, which apparently means lenders can't tell how I would handle a mortgage. Who knew!

Only thing it wants me to do is get a credit card, which does not seem a likely application now I have just been turned down a mortgage.

I think I will just have to wait and see what I find out tomorrow, if anything, and if I have any rights to appeal (Which sounds like a no after what I have just read).

Thank you

[Deleted User]

The scores really are fictional, so ignore them like you would a drunk on a night bus. Your lost 80 points are probably due to the recent drop in temperature.

It sounds as if you a fairly thin file - ie a lack of history. Definitely apply for a card to build some history, but that is a fairly long term game. It won't turn anything around immediately.

Candyapple

The free versions to check your credit files are below:
Experian: https://www.moneysavingexpert.com/creditclub
Equifax: https://www.clearscore.com
Call Credit: https://www.noddle.co.uk

You need to make sure the same information is appearing across all 3 CRAs. If Noddle can't find your accounts then you need to write to each lender and ask they start reporting your accounts to them.

If you're on the electoral roll and its showing as such on Equifax, then this also needs to the case for Experian and Noddle.

Don't forget that your partner needs to join all 3 as well and check his info because as you have a joint account that means you are both financially linked so his history affects yours and vice versa.

Please answer all questions from both yours and your partner's files:

What are your annual salaries?

Please list all credit card limits along with outstanding balances.

Do you have any other loans / overdraft / car finance etc?

Do you have any late payments / defaults / CCJs?

Do you have any other closed / settled accounts in your history?

Do you have many other 'credit' accounts showing on your files such as bank account / mobile phone etc.?

How old is your oldest account on your files?

How many credit applications have you made in the last 12 months?

Kweedan

Okay if you would like me to answer them:

Please answer all questions from both yours and your partner's files:

What are your annual salaries?

Mine 18K, he is self employed, last two years that we posted to the lender was 15.5K (2016-17) and 18.6K (2017-18)

Please list all credit card limits along with outstanding balances.

I don't have a credit card, he has a credit card which had £20 outstanding on it at the time of application, so we put that in. He pays all of his balance off at the end of every month, so it is never outstanding. I think his credit limit is £1,800.

Do you have any other loans / overdraft / car finance etc?

None.

Do you have any late payments / defaults / CCJs?

None

Do you have any other closed / settled accounts in your history?

None.

Do you have many other 'credit' accounts showing on your files such as bank account / mobile phone etc.?

We have a joint account with a overdraft limit of £1,200, however we have never used the account as it as going to be for our mortgage payments and bills. We both have mobile phone contracts.

How old is your oldest account on your files?

Mine is since last May so 11 months, his will be a lot older. His credit card is less than a year.

How many credit applications have you made in the last 12 months?

Me 3, two mortgage applications and a phone contract, his will be 3 also, 2 mortgage applications and a credit card.

Hope this helps

jonesMUFCforever

IMO go elsewhere, either through a broker or another suitable bank/building society.

Candyapple

You just said you opened a joint account prior to the mortgage application so where is that hard search for that?

So you're saying that before you opened the joint account neither of you had your own bank account?

Some reasons I can see why you might have failed scoring:
1. Your oldest account on file isn't even a year old
2. You have no settled accounts or history showing how you've handled credit in the past
3. Not showing as being on the electoral roll
4. Too many hard searches within short space of time
5. Based on your salaries, possible affordability issue

As an aside, how did you manage to save £8k in 4 months based on your low salaries?


I would agree with jonesmufc, if you have no luck appealing with Nationwide, speak to a broker who will know who to place your application with.

Kweedan

Hi, yes that is the plan should this not go very well.

Yes there was a hard search in January for the joint account, you are right.

And no, we both have bank accounts, but I have had my current account for a long time now.

And we both had around 6K left over after the deposit, we wanted to do 80% LTV then a couple of thousand to do it up as it needed a little bit of work.

Yes those are the options that I am thinking also, however it would not be the electoral roll one.

Do we have any chance applying with another lender after being declined by Nationwide?

Thanks for your help