Any hope? Declined after mortgage interview application

Hopeful_FTB

Hello, 
Looking for some help! Do we have any hope of getting a mortgage after being declined?
We were declined for a Barclays Springboard Mortgage putting in 5% of our own deposit and a family member putting 10% down in a helpful start account which they would then get back at the end of the 5 years fixed term. We passed initial eligibility and then passed further checks with the broker but was declined at the final stage full application. We are trying to figure out the reason why we were declined at the final hurdle before we try with a different lender.

A bit of background: 
- I earn £22,000 per year and have no credit commitments (no loans/credit cards/over drafts etc). I have been in my job (permanent full time) since 15.07.2019
- My partner earns £19,350 with performance based income per month (between £90 - £150 extra). He has been in his job, also permanent full time, since 4.11.2019. He has a credit card (£1500 balance £1850 limit, around £36 per month repayment), a personal loan (£3,211 balance, £93 monthly repayment), overdraft on current account at its limit of £850 at its limit (pays overdraft every month with wage but always ends up back in it) and a £2000 student account overdraft currently at 0% interest. 
- We have been at this address (we live in the house we would like to buy) since 20.5.2020 and are due to be listed on the electoral roll on the 1.12.2020
- My partner has a history of pay day loans over the past 6 years with the last one being October 2019. All were payed before they were due.
 
Do you think the reason that we were declined is due to my partners credit (although no defaults or missed payments) amounts or living in his overdraft or the pay day loans? Could it be that we were not on the electoral roll when we did the application (even though we received letter of confirmation we were confirmed in September)? Is it because we tried with 5% of our own deposit and the Springboard mortgage is extremely strict at the moment and we may have more chance with 15% deposit?

We have now passed a DIP with Halifax, property purchase price £170k with a 15% deposit (5% our savings, 10% gifted - the family members who initially were putting 10% in the helpful start account for the Barclays Springboard and agreed now that they will gift us the 10% to raise our deposit it to 15%), and have a call with their mortgage broker booked this Wednesday. Is it worth trying again with Halifax at 15% deposit?  We are mindful that if we keep getting declined it will lessen our chances each time. 

We have tried working with 3 different mortgage brokers now and we are not getting anywhere (one is not answering our calls, one has given up and advised we may as well go direct as we have got our own DIP and the other said they can't work with our deposit amount). We have gained the DIP with Halifax by going directly (which we don't mind) and we would appreciate any advice in our situation. 

Thanks in advance!

Thrugelmir

Continual overdraft usage is certainly a red flag. Likewise the minimum repayment on the credit card. How long will the student overdraft remain at 0%, and what are the plans to repay it? 

Might be worth considering using some of your savings to address the issues. Saving some interest in the process. 

dimbo61

So your partner has about £7,400 debt 
So your Not on the electoral roll yet but have lived in the rental property your trying to buy ?
Keep saving and living the MSE way of life 

Hopeful_FTB

@Thrugelmir
The 0% interest ends August 2021 and plans would be to pay £100 per month after we got the mortgage (currently trying to save for mortgage). Thank you for the advice, perhaps we hold off on trying to apply again and clear up my partners credit, then take some time to save up the deposit again. Make sense! Thanks again

Hopeful_FTB

@dimbo61
Yes we are renting privately in the house we want to buy (from a family member). We did the application to be registered on the electoral roll when we move in 20.5.2020 and the application was confirmed by letter. But on the letter it says we will actually be added to the register on the 1.12.2020. 

MWT

How does your current rent payment compare to your expected mortgage payment?

I assume you are already paying the utilities in your own names? (electric/gas/water)

Hopeful_FTB

@MWT
Yes, we are paying all the bills in our own names. We have an agreement to pay £200 rent and our estimated mortgage would be in the region of £550. We have been putting the difference into our savings. 

Hopeful_FTB

We did also provide all the information regarding my partners credit card/overdraft/loan during the first and second stage of the Barclays process before the full application and we have also provided the details when obtaining the Halifax DIP so that made me wonder if they would continue the application process if the lender was already aware of the debt? Not sure if this is standard procedure or if they would normally decline in the first stages if they were put off and we were unlikely to receive an offer with full application because of it?

MWT

To be perfectly honest, I'm not surprised you were declined as you are looking to increase your committed expenditure each month while your partner is carrying debt equivalent to almost 6 months of his net pay and signs of pay-day loans on his account.

It doesn't fill a lender with confidence that you will be able to handle the mortgage if there are any bumps in the road ahead like house maintenance, a broken cooker or fridge etc. ...

I really would focus on getting his debts cleared, and reach a position where he isn't dipping into his overdraft each month.

Hopeful_FTB

@MWT
Sure, I understand! We will work on this and look for another house in the future (our family member wants the house to be sold asap so will lose this one) and then try again when my partners account is healthier. 

On that note, so you think it is harder to get a mortgage if you are living with family and don't have any bills in your name? We are stuck between living with family and being able to save significantly more/clear debts quicker and renting another place so we can still show we can keep up with bills etc but saving much less?

MWT

Hopeful_FTB said:

On that note, so you think it is harder to get a mortgage if you are living with family and don't have any bills in your name? We are stuck between living with family and being able to save significantly more/clear debts quicker and renting another place so we can still show we can keep up with bills etc but saving much less?

In this case I'd guess it is more that even with the low out-going  expenses you hadn't managed to clear up the debt issues.

No harm in living with family to reduce costs but you have to be able to show the savings are building up and debt is well managed and low/non-existent.