DIP declined by our existing lender?

sunflower92

Just looking for some advice, we seem to be going round in circles really and not sure the best way to start. So we have seen a house we love, however the estate agents will not let us register our interest until our property is sold - which is fair enough, although leaves us in a risky situation - so we have had our current home valued and decided to look at getting a decision in principle however our existing mortgage lender has declined a decision in principle for us. Any advice of what to do next? Look for an independent mortgage advisor? Thank you! 

AdrianC

Sorry - you mean taking out a second residential mortgage, because you're hoping to own both properties simultaneously...?

Do you have the income to meet affordability? What loan-to-value would you be looking at on the second mortgage?

sunflower92

Sorry no, we want to sell our home to move to the new property. When completing the initial DIP process online we was hoping for 90% mortgage with our 10% deposit. Thank you

Bossypants

How much is the 90% and how does it compare to your gross annual income? If it's more than 4x your income, you may struggle on a 10% deposit, but certainly worth asking a broker.

Thrugelmir

Need some more base financial information. A lack of a DIP from your existing lender suggests affordability issues. Combination of income, debt and other commitments. 

sunflower92

The property price is 180,000 so I’ve just worked out we would be about 7ish thousand under the 4x salary. So in this case would it be worth seeing a mortgage broker or trying to stretch to the extra deposit? thanks

Thrugelmir

A broker's guidance would seem appropriate in the circumstances. As they need to be aware of all the facts in order to make an informed comment. 

hazyjo

By the time you sell, your AIP may have expired. I'd hang on personally. Any idea why your existing lender has declined?

sunflower92

Not to sure to be honest, it may be because employment has changed to self employed since the mortgage began however we have more than 2 years worth of accounts. We have never sold before this, this was our first home so unsure how people usually start off... am I right in thinking we should sell our house, mortgage advise and then put an offer in on a new property. Sorry if this is a daft question! Thank you everyone

Thrugelmir

Ascertaining what you can potentially borrow is where to start. 

mwarby

Have you spoken to your own lender, or just done an in-line application? If just an online application they might view it as you wanting to own 2 properties, a quick conversation may get you the DIP