Mortgage Declined by Nationwide/Arrears

MuddyFunster

Currently applying for our first mortgage at the tender age of 42 and frankly, losing my mind a bit. Sorry, this will do doubt be a massive post.

Broker has warned us it might be a tough sell, due to affordability and 95% LTV.

The house we want to buy is £225k, we've got a combined income of £84k But £700 of Debt Payments a month (Cars mostly, we get car allowances to cover from work). Mortgage would be £1050 a month, but this is within £10 of our current housing costs and we've been saving between £400 and £700 a month, every month for 3 years. All things considered, we'll be £500 a month better off when we move.

I warned him I have a 5yr and 11mth old (settled) default for £84, a combination of EE's less than great customer service and my pigheadedness, but he said "I wouldn't worry, Banks will often ignore small amounts, especially from Mobile companies and especially one that will fall off your account in 3 weeks".

So, he started with Yorkshire, they'd lend £260k, great, but declined because of the default.

Principality said yes! but only for 190k.

Next came Nationwide they've worried me. They've declined - the broker forwarded me their e-mail. "After being assessed by our underwriting team, the application has unfortunately been declined. The Applicant holds a nationwide current account which is in arrears". I DO have a current account with them, it's a 'Free Basic' account, which I opened in 2011, I haven't used it meaningfully in 3 years, but it has a credit balance of £4 and has never been overdrawn or anything like that.

Should I:

1) Find a new broker, I've lost some faith in this one, we're not in any real hurry, the house we want to buy is still going through probate and we have "first dibs" when it does clear in a month or two. If I hadn't heard the "wouldn't worry" line from him, I would have happily waited 3 weeks.

2) Ask him to appeal the Nationwide decision, two things have happened I would guess, either they've made a mistake, they've sent the wrong response and they're declining due to the default or the account I opened in 1993 at the age of 16 and closed in 1999 when I got my first 'proper job' is in arrears and they have VERY long memories. I've no reason to think it was, but hey, I was a kid and it was 2 decades ago.

3) Speak to our bank (Lloyds), they gave us an online agreement in principle (this was based on my interpretation of income and expenditure which may be a bit off) but also a 'soft' credit search for £325k! @ 3.5% no fee, broker is looking for 2.9%, £500 cash back, no fee.

4) The Broker has suggested waiting now until the default is gone, so try to relax a bit, wait 3 weeks and see what he comes up with?

5) Give up on this house, wait 4 months until a Loan we have ends and our affordability improves, gambling on there not being a post-brexit spike in values (seems unlikely)

6) Something else.

[Deleted User]

Sounds like an incompetent broker tbh
Nationwide don't ignore communications defaults, only a few companies publish that the specifically ignore them.
Yorkshire (Accord?) would ignore a default that small after 3 years


If you've got a AIP with Lloyds at least it's a good fallback. Rate is rubbish though. Halifax usually do better rates with same criteria so youd at worst be better going there.

Nationwide may have an internal record that an account was closed in arrears. You can do a dsar to find out I suppose

If you have car finance but car allowance then lenders can take that as income.

Get a new broker would be my advice. Sounds like he's just going down the list and getting aip's from everyone rather than actually knowing who would take the case.

I wouldn't be surprised if someone who knew what they were doing got an accept from a lender that has already declined, brokers are full of stories about getting cases through where others have failed. ACG has built his entire career on it!

MovingForwards

Have you obtained copies of all your credit reports and gone through all the information to see if there is anything amiss?

I know through playing with NW mortgage calculators they reduce potential lending due to outgoings.

I also know from reading up on mortgage criteria with various lenders a lot do turn a blind eye to aged defaults especially with mobile companies.

NW may have historic information about you, it's surprising how far back banks and building societies have records for.

It's possible your high outgoings are the problem and the default is the straw that broke the camel's back, or the high outgoings are the straw. Or it could be you only have 5% deposit and a load of outgoings, therefore the risk of issues falls on the lender and not you.

Is the broker a while of market, independent broker and not one tied to an estate agents, or an online broker such as habito / L&C?

Brokers will be along to offer suggestions.

MuddyFunster

MovingForwards wrote: »

Have you obtained copies of all your credit reports and gone through all the information to see if there is anything amiss?

I know through playing with NW mortgage calculators they reduce potential lending due to outgoings.

I also know from reading up on mortgage criteria with various lenders a lot do turn a blind eye to aged defaults especially with mobile companies.

NW may have historic information about you, it's surprising how far back banks and building societies have records for.

It's possible your high outgoings are the problem and the default is the straw that broke the camel's back, or the high outgoings are the straw. Or it could be you only have 5% deposit and a load of outgoings, therefore the risk of issues falls on the lender and not you.

Is the broker a while of market, independent broker and not one tied to an estate agents, or an online broker such as habito / L&C?

Brokers will be along to offer suggestions.

Yes I’ve got accounts with Credit Karma (the broker asked for the log-in) MSE Club and Clear Score.

CK and MSE show the default, Clear Score doesn’t, my Wife’s files are perfect.


He’s a ‘whole market’ broker. I’m told he has access to 100+ lenders and there’s little chance of getting nothing, but he’s not keen to go for sub prime type stuff.

I think I’ll have a look for another broker.

MuddyFunster

The plot thickens...

Nationwide have been back on. Apparently my account has limited use since last Dec (I haven’t used it in years) has charges, is over drawn and in arrears.

My banking app shows exactly what I expected, £4 in credit, no charges, no arrears. My 3 CRAs are all confirm the same.

I’ve got a very common name, I wonder if I’m being mistaken for someone else.

Penelopa.Pitstop

You have to talk to Nationwide and check what's going on.