Mortgage decline- please help

djs_97

Hi all,
Looking for a bit of advice following my recent mortgage decline as I’m praying there’s still hope!

I am looking to buy a 25% share of a shared ownership property. Total property value is £145,000 and my share would be £36,250. I have a £5,500 gifted deposit meaning I’m looking for a mortgage of £30,750. My salary is currently £21,015. I am applying on my own as advised by my broker due to my partner’s adverse credit. 

I received a DIP from Leeds Building Society late June but they asked me to repay my personal loan which I was able to do with gifted money (I was gifted more than the deposit amount).  My broker submitted the full application but it was recently declined due to affordability they said there is an income shortfall but they were aware of my salary when considering the DIP! The decision said the max they could offer is £18,000. They also said I am buying the house using a gift and personal loan was repaid using a gift with no contribution from me which they would not expect from someone living at home with parents? I have been saving and they had savings account statements demonstrating this, my broker just said it would be easier to say the deposit is 100% gift rather that mess around with it being part gift and part savings. My savings and gifted money is held in the same savings account. 

My broker took 13 days to notify me of the decline, I was not happy at all but he says he was disputing this with Leeds and they again have declined. Admittedly I was in a bit off a huff and decided to go for my own DIP with Halifax I knew it was a soft search and I was adamant I didn’t want to pay my broker another penny after him taking nearly 2 weeks to update me (I had to call Leeds myself to be told). Anyway, the DIP with Halifax was declined due to affordability they said they could only lend me £13,000! I don’t know what I was expecting and was very much trying my luck as I was upset with the broker. 

Today my broker has said he has sourced another lender and they are looking at the case for us. I’m sorry this is so long but I guess I am feeling a little hopeless, I can’t imagine anywhere being willing to lend me just over £30k when my maximum offer so far has been 18k. I am totally confused as my monthly commitments (credit card and car HP) equate to £214. Is anyone able to give any advice on whether it could still be possible or am I simply asking for too much based on my salary? 

Thank you!!

Tonyw193

Normally you can borrow 4 x your salary so in theory your more than within the affordablilty range. Even if its been tightened with covid. Banks have affordability calculations on their website. Have you recently checked your credit score to see if its ok?
Having a declined mortgage on there wont help anything but to see if your credit is in good order 

djs_97

Hi, 
That’s exactly what I thought. Before applyI got with Halifax I did the online calculator and it said I could borrow up to 60k but was then offered 13k over the phone.  My credit file is fine no missed payments or defaults etc which is why I was encouraged to apply on my own rather than with my partner. Totally confusing. 

Tonyw193

Im guessing the issue maybe around the criteria of the deposit. Im currently looking at a nationwide mortgage and i know my deposit cant be from a gift must be all my own savings. Your broker should have been fully aware of that. If that is the case... Just one possibility anyway. 

djs_97

Yes potentially, although again Leeds were aware it was a gift before they approved the DIP. Fingers crossed I have better luck with the lender my broker is looking in to at the moment.

Slithery

Have you checked all 3 credit agencies?

MaryNB

As above. Equifax, Experian and TransUnion may not all have the same data. I had different issues with my data across the agencies due to my awkward address.
Maybe the fact your loan had only just been repaid isn't reflected on your credit file yet (or at least the agencies Leeds and Halifax have been using). How much extra would it have cost you a month if you were still paying it? 

djs_97

Yes I’ve checked all three agencies as my broker requested that I use Check my File. 

When going through the DIP with Halifax they actually said it was declined at first, the advisor over the phone said it was because it was still picking up the loan with it only being recently repaid, the system was thinking I hadn’t declared it. She then put the correct loan in and said it would be repaid upon completion and that’s when I was offered £13k. My loan repayment used to be £180 pm. 

MaryNB

Have you've done any gambling that would show up on an account? My friend has a very good job and good finances but was initially turned down by his bank because they could see he gambles occasionally. 

djs_97

No but that would be understandable. I mean I have paid for things like the lottery online before but I don’t believe there is any gambling in the last 3 months on my statements. 

MaryNB

I'm trying to rack my brains (bearing in mind I am not a financial expert at all). I assume if you're living at home your monthly outgoings are significantly less that someone who would be renting. Maybe the fact you have a personal loan while still living at home makes the bank think you cannot live within your means. They may also be assuming your monthly outgoings should be very low. Obviously I don't know your personal circumstances (if your parents are charging you rent and bills etc) so I can only speculate.