Struggling to get a loan at a good rate

[Deleted User]

To give the thread some context the OP’s parents divorced some time ago with the mother retaining a 75% share of the property and his father 25% with some weird conditions upon which that 25% can be relinquished. 

Father died intestate and as the father’s only child the OP should inherit the 25% but the father’s partner (not married) at the time of his death might contest this. For some reason none of the parties involved want to get this resolved one way or another. 

Meanwhile the interest only mortgage term is coming to an end and neither parent had a repayment vehicle in place. Mother doesn’t want to sell and doesn’t want another loan secured against the property and is now putting undue pressure on the op to sort out the mess. 

It seems the OP is under a lot of pressure which might explain the posts as the frustration of the situation is directed towards everyone but the architects of this situation.  

[Deleted User]

p00hsticks said:

Beardybaldy said:

Adams18 said:

I save 66 per cent of my salary every month as disposable income..... 
all i want is a 25K loan that i can afford

And if it's to pay off your mother's mortgage, which is very commendable, why borrow money in the first place, why not just pay her mortgage repayments? 

From what the OP says, the mortgage was in his recently deceased fathers name - presumably his mother doesn;t have the income to be able to get a mortgage on the property herself.

I'm not sure what practical difference that makes. 

The lender wants repayment. Repayment is offered. Even if the lender won't take it for purely bureaucratic reasons, it takes at least a year to get from first default to repossession, and on OPs savings, its 8 months to raise the 25k he's looking for. 

-taff

Adams18 said:

Thanks for your reply, as I have stated several times that is not the case as the same lender accepted me when I had higher levels of debt and a slightly lower income.
my debt to income ratio is perfectly fine imo as it is a ratio of your monthly expenditure on debt repayment against your monthly income.
Some lenders take gross some take net... eitherway im at a healthy average even if I took out a 25K loan today over 5 or 7 years
the bottom line is the lender was perfectly happy before when i was in a worse situation with my debt level and income.

It doesn't matter what happened last year, last month, last week. Now, this particular time, they don't want to lend you money. They think you either can't repay it, or your debt is too much. SInce your current wages preclude the first one being a problem, then it must be the second, because they don't make decisions based on your eye colour or any other spurious reason.

Brassicwomans suggestions is likely the only viable way to do it, and this will, on your wages, be completely paid off in a year according to your repayment intentions, so you can either stand guarantor to your mothers mortgage and pay it if she can get one, or get a joint one and pay it.

[Deleted User]

getmore4less said:

Adams18 said:

-taff said:

So your credit utilisation is at 24 percent? Net that's roughly 12 and half, add 25 grand to that and you're over half your wages in debt so 37 ish grand owing on a net take home of about 50. That is why you're being rejected. Companies don't care how good you look in your own head or on CRA paper. There is nothing you can do about this except reduce your current debt and make sure it's all paid on time,including any bills you might pay manually instead of direct debit.

Thanks for your reply, as I have stated several times that is not the case as the same lender accepted me when I had higher levels of debt and a slightly lower income.

my debt to income ratio is perfectly fine imo as it is a ratio of your monthly expenditure on debt repayment against your monthly income.

Some lenders take gross some take net... eitherway im at a healthy average even if I took out a 25K loan today over 5 or 7 years


the bottom line is the lender was perfectly happy before when i was in a worse situation with my debt level and income.

Same lender will be seeing your previous application.

Might just not like multiple applications in a short time.

I havent made a single application this is all elgibility checkers and soft searches

i dont have one hard enquiry on my credit file right now obviously i dont want to risk it

i want the likelihood given before i even apply

[Deleted User]

Billy_B_North said:

Adams18 said:

Billy_B_North said:

Adams18 said:

Aran76 said:

I know it can be frustrating being declined when you think you should be accepted, this has happened to me before and in my experience the lender will rarely give much insight into their decision and will point you in the direction of your credit file. The lending criteria varies and I'm sure it is constantly being reviewed by lenders.

You said that you have been applying for loans "across the board" within the last 6 months, are these hard searches? In which case this in itself would be a red flag for lenders as it demonstrates desperation for credit. 

The big positive for you is your £70k salary, which should (depending on your other commitments) put you in a privileged position to drive down your debts and free up more of your earnings.

All soft searches, which is the same information pulled up by hard searches except for the caveat we all know about of course.

hey I really appreciate your response here and believing my story. 

I didnt want to take the news lying down so i just had to dig and dig and call everyone i can to get some idea of whats gone wrong for me.

the reason i make this thread is because the same lender approved me and then denied me despite my situation improving only months apart.

This might sound pompous and i dont mean it in this way but 70k a year to me is useless income if it cant help me get the loan i need because im desperate for it and know i can afford it.

i have all this disposable income and it is not helping me out of the situation im in which calls for a 25k loan at low apr.

even having a great credit file just does little for me right now when i need it the most.

very frustrating.. if only it was july 2020 again for me id get the loan

It sounds like you have no savings, which is surprising, what was behind your decision to spend everything that you earn?

It is completely irrelevant my savings, the only thing that is relevant is that I need a 25K loan now..

I can perfectly afford it

Well no, you can’t. You are spending every penny that you earn, so you have nothing extra for loan repayments. You are also finding that mainstream lenders don’t believe that you are able to easily pay it back, which is why you are having trouble getting headline rates.

You need to have your lightbulb moment, you seem to be living behind your means but to be in denial.

Spending every penny i earn?!

what are you talking about??

any figures to back up your post?

i have 2000 a month disposable.

the loan is 330 to 450 a month

where is your lightbulb moment

[Deleted User]

Billy_B_North said:

Adams18 said:

Okay i see whats happening now with the forum

is it jealousy? That i make 70k a year... you guys think im so rich and i shouldnt have any money issues and that im the problem

No, the problem is that you don’t actually earn all that much but that you lack the sense to have accumulated some savings, and now find that your choices mean that you can’t help a family member.

Sadly it seems that your parents didn’t make appropriate provisions either.

Like i said... ive saved up

my mum saved up

my dad didnt save jack

still need 80 plus grand to settle mortgage which has reached end of term

i have 2000 disposable income a month and need a loan for 330 to 450 a month

Its a perfectly plausible situation

[Deleted User]

p00hsticks said:

Beardybaldy said:

Adams18 said:

I save 66 per cent of my salary every month as disposable income..... 
all i want is a 25K loan that i can afford

And if it's to pay off your mother's mortgage, which is very commendable, why borrow money in the first place, why not just pay her mortgage repayments? 

From what the OP says, the mortgage was in his recently deceased fathers name - presumably his mother doesn;t have the income to be able to get a mortgage on the property herself.

Thats correct she is on benefits it is an interest only mortgage meaning for the past 30 years the outstanding balance has not changed 

[Deleted User]

Nebulous2 said:

OP - this is getting very bogged down. 

There is clearly something going on, which is impacting your ability to get a loan. You need to take the heat out of it, go back to basics and review your own situation. 

Lenders like stability. That means - being on the electoral roll. Long-term at the same address is better.  Being in steady employment. Having a history of repaying debt on time (you say you have that) 

I'm struggling to understand what you have done in terms of applications. On the one hand you have insisted every application has been a soft search. Yet you are saying you had a firm offer from a lender last year. That must have had a hard search. What happened with that offer? Did you decide not to proceed? If you did, as someone said already, they may not like multiple applications in a short timescale. How many hard searches have you showing in the last 12 months? 

So trying an eligibility checker - what does it say? Are you using generic ones, or ones on the lender's own website? Are you getting offers, but not at a percentage you like?

I pointed out on another person's thread, and you responded quite forcefully disagreeing, that the best rates tend to be for £7.5k - £15k over 3 years.  Lenders are concerned about risk. The world is an uncertain place, and the more you push out the timescale, the more uncertain it becomes. 7 years is a long time. £25k is a lot of money, although you appear to disagree.

Have you tried a checker for £15k over 3 years to see what difference that makes? 

Nebulous2 said:

OP - this is getting very bogged down. 

There is clearly something going on, which is impacting your ability to get a loan. You need to take the heat out of it, go back to basics and review your own situation. 

Lenders like stability. That means - being on the electoral roll. Long-term at the same address is better.  Being in steady employment. Having a history of repaying debt on time (you say you have that) 

I'm struggling to understand what you have done in terms of applications. On the one hand you have insisted every application has been a soft search. Yet you are saying you had a firm offer from a lender last year. That must have had a hard search. What happened with that offer? Did you decide not to proceed? If you did, as someone said already, they may not like multiple applications in a short timescale. How many hard searches have you showing in the last 12 months? 

So trying an eligibility checker - what does it say? Are you using generic ones, or ones on the lender's own website? Are you getting offers, but not at a percentage you like?

I pointed out on another person's thread, and you responded quite forcefully disagreeing, that the best rates tend to be for £7.5k - £15k over 3 years.  Lenders are concerned about risk. The world is an uncertain place, and the more you push out the timescale, the more uncertain it becomes. 7 years is a long time. £25k is a lot of money, although you appear to disagree.

Have you tried a checker for £15k over 3 years to see what difference that makes? 

Thank you for your solid response

i can appreciate a response like that

ill be clear, i never actually made a full application to the lender im trying to get a loan from only soft search via their elgibiility checker 

all throughout july and august 2020 i was being preapproved on a soft search for 25K over 7 years OR 20k over 5 years all at 3.0 per cent interest rate

i was just testing the water at the time, needed to weigh up my options before i execute. Elgibility checker was saying 9.5 /10 chance



I have no hard searches at all on my credit file.

when they did preapprove me, i had a 14.5
k outstanding loan and 5.5k on my credit card

now i have 3k on credit card and 12.5k on outstanding loan and i cant get any rating at all

just denied.

nothing else has changed except i took out car insurance recently

other than that my credit files are perfectly fine with electoral register, address, no fraud, no issues at all!!! 

Im also earning more income now then i did back in july and august 2020

and i just want to get a reason as to what the issue or red flag is because all lenders using the same elgibility checker technology which is powered by HD descisions and owned by Experian are rejecting me.

[Deleted User]

-taff said:

Adams18 said:

Thanks for your reply, as I have stated several times that is not the case as the same lender accepted me when I had higher levels of debt and a slightly lower income.
my debt to income ratio is perfectly fine imo as it is a ratio of your monthly expenditure on debt repayment against your monthly income.
Some lenders take gross some take net... eitherway im at a healthy average even if I took out a 25K loan today over 5 or 7 years
the bottom line is the lender was perfectly happy before when i was in a worse situation with my debt level and income.

It doesn't matter what happened last year, last month, last week. Now, this particular time, they don't want to lend you money. They think you either can't repay it, or your debt is too much. SInce your current wages preclude the first one being a problem, then it must be the second, because they don't make decisions based on your eye colour or any other spurious reason.

Brassicwomans suggestions is likely the only viable way to do it, and this will, on your wages, be completely paid off in a year according to your repayment intentions, so you can either stand guarantor to your mothers mortgage and pay it if she can get one, or get a joint one and pay it.

Thank you for your advise,
i just want to pay it off for her peace of mind and she can own her home after living in it for 32 years instead of taking another mortgage out for another 25 years.

you say either “they think i cant afford it or my debt is to high” thats the confusion point here

as a few months ago when i was preapproved by the lender in question I was earning LESS and my debt was much HIGHER.

so whats the negative on my standing as a borrower?? Thats all id like to know before having to fish for another loan at a higher interest rate which will cost me much more

25k loan over 7 years is 330 pounds a month

330 !!

hardly breaking the bank when you have 2000 disposable income

income i dont use on anything else

mortgage lender want their money now or soonish not next year

enthusiasticsaver

Lenders are being more selective given the economy may be going into a downturn when the furlough schemes end so this could be one reason for your decline. Pre Covid they were quite gung ho about lending so any earlier agreement you may have had may not have been scrutinised that closely. Also pre approved is not a cast iron guarantee they would have lent.  Sometimes they change their mind when they have looked closer at applications. Unless of course you actually had an offer in your hands. 

I am not sure what reason you have given for the loan but it could be they do not like you borrowing for a property on an unsecured basis as they will assume it is already mortgaged to the hilt or there is some other reason it is unmortgageable. £25k is not an insignificant amount and a lot of people would assume a secured loan would be better. It may be putting up red flags to possible lenders. Do you have another mortgage on a different property?

Other than the two reasons above and given your debt is manageable and you have a good steady income I don't know why they are not giving you favourable responses.  Have  you tried approaching the bank where your mothers mortgage currently is? I think I responded on one of your other threads to recommend caution on paying off your mums mortgage as this may affect your position in the future if you want a mortgage of your own or need to remortgage.