Declined DIP what’s gone wrong

boxer234

Hello 

My broker has run a 95% DIP with bank of Ireland (declined) Halifax (wants a 15% deposit) 

She has been through my credit report and bank statements couldn’t see any issues. 

My credit report excellent but not 999 with equifax and Experian. Trans union fair but not negative aspects.  

I have no late payments or adverse credit.  

I did stupidly reduce my overdraft a few months ago which is showing up as a search.  

I do have CC debt well within affordability but is showing up as red in Experian as utilising a high percentage of credit. (Using 86%)  Is this the problem? If I pay down my CC will it improve my score ? (I could get it down to 50%) Or should I throw the money at savings for the next 6 months and get 10% deposit? 

Thank you in advance. 

Caracal

Ignore the score, the only thing that matters to the lenders is your credit history.

Possibly using a large amount of available credit is an issue, as you have suggested, or perhaps the search. Or perhaps you just don't fit the profile of the kind of person your lender wants to lend to at the moment.

Good article here: https://www.moneyadviceservice.org.uk/en/articles/why-mortgage-applications-are-declined

But your broker should be able to offer some more guidance - they may be able to contact the lender and ask them?

[Deleted User]

Your scores and Experian red warnings aren't of any interest to lenders. They're just provided for entertainment purposes. It's all about the data, your debts and credit history.

Starting with the basics, what's your income, debt and required borrowing figures? 

Are you using a proper broker or one out of an estate agent, for example?

boxer234

Hi thanks everyone.  I’m using a broker I found on unbiased.  To be fair I think she’s worked her socks off she was confused at decline.   

Annual salary 47000 secure permanent job
cc debt 5000
loan 145 5000 outstanding 

Affordability came back at 209000 with £11000 deposit.  I know my debt wipes out deposit but it seemed to pass on affordabllity.  

I can save or pay around £600 per month from now on.  

K_S

@boxer234 The lenders do their own "credit-score" (not to be confused with the Experian/Clearscore/CreditKarma one) for each individual application. This is somewhat opaque and based on a lot of different factors.

At 95% LTV lenders will have turned up their "credit-score" requirement to "very high" and the current 95% regime is all a bit new to us as well.

Will reducing the 5k cc debt increase your "credit-score"? Probably. Will it increase it enough to qualify as per the lender you're applying to? You'll need a DIP to tell I'm afraid.

kingstreet

A lender's "credit score" is not all about credit conduct.

It can include time at address, time in job etc. At 95% lenders are going to be looking for the top candidates and many will have been at same address and/or in same job for three years or more as well as having well-managed credit and a well-managed current account.

boxer234

Hello thank you everyone this is helpful.  I’ve only been at this address 1.5 years and in my job 3.  My current account is I’d say well managed but could always be better I suppose.  Broker went through the statements with a fine tooth comb. 

We’ll plan of action pay of CC and keep saving maybe look again in 6 months or so a bit disappointing.  

My own bank phoned to discuss a mortgage with them is that likely to be more successful or no difference? 

K_S

@boxer234 If Accord fits on other criteria, they may be worth a try as well.

From the few 95% DIPs that I've done, they've been (by far) the most predictable, quick to turn it around and happy to give clearer feedback than other lenders in the space. Of course that's just anecdotal based on a small subset of my clients.

boxer234

K_S said:

@boxer234 If Accord fits on other criteria, they may be worth a try as well.

From the few 95% DIPs that I've done, they've been (by far) the most predictable, quick to turn it around and happy to give clearer feedback than other lenders in the space. Of course that's just anecdotal based on a small subset of my clients.

Thank you they will lend me less however it would be fine for me.  Would it be detrimental to apply for another DIP after two ? 

K_S

boxer234 said:

K_S said:

@boxer234 If Accord fits on other criteria, they may be worth a try as well.

From the few 95% DIPs that I've done, they've been (by far) the most predictable, quick to turn it around and happy to give clearer feedback than other lenders in the space. Of course that's just anecdotal based on a small subset of my clients.

Thank you they will lend me less however it would be fine for me.  Would it be detrimental to apply for another DIP after two ? 

@boxer234 As long as the information being input is consistent across the DIPs, and they're soft-footprint credit checks, it should not be detrimental.

Capri84

Watch out though - it’s not clear how the soft/hard check is determined. 

We applied for Coventry 95% and they ran a hard check. DIP expired (only 28 days!) so now they’ve to run another DIP so that’ll be 2 hard checks on file within a month!