Hard credit check Mortgage application

georgialauren

We recently applied for a mortgage through Barclays as first time buyers, to enable us to apply online as no branches are open they told us we had to set up a current account to verify us, this current account has no overdraft or credit facility. We completed the mortgage application affordability criteria and had a decision in principle yet got rejected for the mortgage we wanted (offered 85% but needed 90%). We asked why this would be as we are aware we both have excellent credit scores and passed the initial phases. The mortgage advisor could not give any clarity on this apart from ‘it could be anything even your age’ she advised we did a deep delve of credit history to try to improve it before a further application. Again after checking scores are excellent but we now have 2 hard searches in the space of a week, one for the opening of the current account and one for the mortgage application. We were concerned the first credit check has implicated the second so called Barclays to see if they could clear the first credit check seeing as it was only one mortgage application. They then said that our credit has no issue on the system so that was not why we couldn’t get the mortgage and again could not provide any further clarity but is investigating this for us. I now don’t know how to proceed, I can’t do anything to improve my score and I need to get a mortgage pretty quickly. I am concerned if we now apply for another mortgage in the next few weeks the hard checks from Barclays will implicate our application even though our credit wasn’t the reason for rejection. After reading all advise from MSE I am advised to not just keep applying but what other option do I have at this stage. Any advise is greatly appreciated. 

jamielutz1987

@georgialauren
As per the latest rate card on their website (wef 2 June), they don't currently have any purchase products over 85% LTV, other than the "Springboard" range (supported by family). That could be the reason?

Afaik there are only a couple of lenders in the market offering 90% LTV  products at present. Might be a good idea to talk to a whole of market broker to confirm that.

https://www.barclays.co.uk/content/dam/documents/personal/mortgages/CoreRangeCustomerRateSheet.pdf

LRmortgage

As above, Barclays aren’t currently offering 90% mortgages unless you are going for a family support / springboard mortgage? 

So it’s possible that computer says no is more computer can’t say yes because they don’t have a product to offer you. 

Speak to a broker, there are some very limited 90% products available with other lenders at the moment. 

georgialauren

Yes it was the family springboard we applied for with Barclays, the minimum they can go to on family springboard is 90% but the max they could lend was 85% so we didn’t get ‘accepted’ for that particular mortgage. I have a DIP with nationwide for a 90% mortgage but am concerned when they come to do the hard credit check next week they may rejected based on the 2 previous hard search in the last week or so. 

[Deleted User]

Credit scoring is a dark art - so as the adviser said it could be your age, it could be anything really. I appreciate that's not particularly helpful when trying to pin down a reason, but I think the point they wanted to convey was the genuinely can't help. I would be very surprised if 1 search affected it (and likewise, I'd also be surprised if two searches means you don't get accepted elsewhere). Everyone has searches from time to time in the normal course of life (utilities, phones, current accounts). Whilst the whole process doesn't sound great, I don't think it'll hinder you. It is advised to have no searches, but won't automatically drop you down to a significantly lower score on it's own. You say your credit / score was good, but there are other areas (and Experian aren't lending to you, so unfortunately that score is irrelevant). e.g. Experian don't know your income, if that's on the low side it might be an issue. Experian don't know what LTV you wanted or that you wanted family help (could be argued that it's essentially a 100% mortgage). 

When you said you had a DIP - was this a DIP for the 90% springboard range? Did you have an option to specifically say you wanted that, at DIP stage?

I'm not sure specifically how Barclays work, but with other lenders for 'specialist' products (such as Help to Buy, Shared Ownership, Right to Buy etc... and I'd imagine the springboard would also count as specialist) the online AIP won't give you an accurate result - that's because it's likely scored differently, to reflect the different risks and costs than a 'normal' mortgage. 

E.g. a springboard mortgage could be scored as 'harder' to get than a standard 90% mortgage. If you did your DIP for a 90% mortgage and only were able to say you want Family Springboard (AFTER the accept DIP) that would skew the results and mean your DIP was inaccurate - hence the offer of a lower risk loan only.

If you've been directed to their site though (by Barclays) then that is poor if that DIP wouldn't be accurate.

From what I can see, their site says to visit a branch or call, it doesn't offer a web DIP on that section (https://www.barclays.co.uk/mortgages/family-springboard-mortgage/), whereas a 'normal' mortgage on their site (e.g. https://www.barclays.co.uk/mortgages/fixed-rate-mortgage/) does clearly lead to get AIP. I think as you've been clicking around their site, potentially you've gone on through for a 'normal' one and not realised that actually you have to call and make explicit you want something in the specialist range??

For example, I can get an AIP with Lloyds and pass, but it says to call/go to branch if using a scheme such as HTB. So if I do it online now and pass, that result means nothing if I then do go on to submit a HTB case. I believe Nationwide are the same.

Best of luck with everything - and whatever you do, I know you aren't happy about them but don't 'dispute' any of the Barclays searches at the CRAs - it'll just cause your applications to be referred and will slow it down, which isn't what you want with what's going on in the world right now!

If your Nationwide DIP was after the Barclays one then it would have taken their searches into account. If it wasn't, then it wouldn't have - but two searches shouldn't be a massive deal to be honest.

You could try asking Barclays if the web AIP was actually valid for that product range - and if it was, what changed - they should be able to answer that. Although it may take time, you may have to go down the formal complaint route and they might only give vague answers like 'risk appetite' or 'lending/scoring criteria changes from time to time' - so you'll probably need to look elsewhere to get a prompt resolution to be honest.