Santander declined AIP/DIP

bex_mar

Could it have been because the outstanding credit card balance on my credit report is showing as more than what was keyed into the AIP application? £2000 has been paid off (over a month ago), but credit report has not updated yet and still shows the higher amount outstanding.

The only other thing is 1 late payment, 7 months ago, for £3.99 on Very account.

Just wondering if it's worth waiting until the credit report updates and trying again?

Some figures if they are of any help:
Mortgage amount wanted £153,500
House Value £210,000
Single application
Self employed income 16/17:£24K, 17/18:£34k
Outstanding credit card balance: £3.7k (still showing as £5.7k on Experian)

Thanks in advance for any help or advice.

foxy-stoat

Doubt it was the £2K that was paid off and not updated as your incomes look ok and not a hugh LTV.

Maybe it was the late payment - but who knows....I do not expect the lender to tell you the reason for the decline.

Did you use a broker or did you go into Santander directly?

anfieldred

Doubt it would be the 1 late payment declining it.

Go through a broker. It's a significant jump from 24-34k. The average is £29k and you're asking for a 5x multiplier on your average salary over the 24 months.

On their lending criteria page (https://www.santanderforintermediaries.co.uk/products-and-criteria/mortgage-lending-criteria/) it says "Where there are unexplained downward trends or sharp increases in the most recent year!!!8217;s trading figures, please provide additional information to explain why."

I ran your figures through their "how much can I borrow" calculator : https://www.santander.co.uk/info/mortgages/how-much-can-i-borrow.

I put salary as 29k
deposit of 50k
credit card 3.7k

The figure was £129,050. I'd say - try a broker who can go for different lenders, or maybe look at lower value houses.

kingstreet

What's the reason for the decline?

If it's affordability, yes, anything repaid in the last three months visible on your credit file will be treated as still outstading by Santander.

bex_mar

Thanks for the replies.

I have gone through a broker. Although he made a big mistake a couple of days ago, so may look at others. He got a DIP approved with Santander but noticed this morning that he keyed in the current house value as £2,000,000 instead of £200,000!! So when he did the DIP again this morning, using the correct figures (£210,000) it was declined. He said it didn't pass the credit score.

We aren't moving, its a remortgage. Current mortgage is £93,500 (with Nationwide) but want an extra £60k to build an extension, so are remortgaging for £153,500. Broker went with Santander because they calculate affordability based on latest years Net Profit, they don't use an average like other lenders (what he said).

Santander only do a soft search, so I may wait until Experian updates and try again.

bex_mar

kingstreet wrote: »

What's the reason for the decline?

If it's affordability, yes, anything repaid in the last three months visible on your credit file will be treated as still outstading by Santander.

The mortgage broker said its not failing on affordability, because it did pass an AIP originally, when he put in the wrong house value figure (£2million instead of £200k). It then failed when he put in the correct house value figure, so the LTV changed to 75%. He said its the credit score (871 on Experian) thats an issue, as its only a 'Fair' score. I thought lenders didn't even look at the credit 'score', they have their own scoring system and look at the credit history...

I definitely think I need a new broker.

Thrugelmir

bex_mar wrote: »

We aren't moving, its a remortgage.

You say "we". How many dependents do you have. As this will impact affordability calculations.

bex_mar

Thrugelmir wrote: »

You say "we". How many dependents do you have. As this will impact affordability calculations.

3 dependants: 1 adult and 2 children. When I input all the numbers and figures into Santander affordability, it comes out at £159K. That includes £34k self employed net profit and £1800 annual child benefit. So affordability can't be the issue, it has to be credit report. Only thing on there is the 1 late Very payment 7 months ago for £3.99 and that Barclaycard have not updated the outstanding credit balance, so it's still showing at £2.5k rather than £500.

Thanks for your help

Thrugelmir

£159k looks high on the information you've supplied.

bex_mar

Thrugelmir wrote: »

£159k looks high on the information you've supplied.

That’s what Santander’s own affordability calculator says. The actual amount I asked for was £153,500.

You don’t think it will make any difference when the credit report updates to show the reduced credit card balance? I just wondered if the issue was because the outstanding credit card balance declared on the AIP is different to what the credit report currently says.
I guess the only way to know is to apply again when the credit report has updated. If it’s still a decline, perhaps i’ll try for a lower amount.