Declined after DIP 5% mortgage

Candyrain93

Hi all, just wanted to get some advice if anyone has had this experience. 

Recently had to move out of our rented accommodation due to our landlord selling up and moved in with family. Obviously living with family is not ideal. We have a  5% deposit  saved and recently got sale agreed on a home. Applied for a mortgage with Barclays and received a decision in principle, affordability is no issue. Mortgage was declined on the basis of credit rating. My husband and I have never missed a payment or defaulted. The mortgage broker informed us that we would be accepted for a 10% deposit but obviously at the moment that is not doable. The mortgage broker requested that we contact equifax as to why the application was declined. The only marker against us was that the electorial roll had not updated our new address yet. We have submitted an appeal in the hopes that someone will take this into account. Is there any hope or is a decline a decline? 

Thrugelmir

Your assessment of affordability and that of the lender may differ markedly. Not least that lenders are required to consider the impact of higher interest rates in the future. The obvious question is your level of indebtedness on credit cards, loans, car leasing etc. Have you received any Government grants or loans due to the pandemic? 

K_S

Candyrain93 said:

Hi all, just wanted to get some advice if anyone has had this experience. 

Recently had to move out of our rented accommodation due to our landlord selling up and moved in with family. Obviously living with family is not ideal. We have a  5% deposit  saved and recently got sale agreed on a home. Applied for a mortgage with Barclays and received a decision in principle, affordability is no issue. Mortgage was declined on the basis of credit rating. My husband and I have never missed a payment or defaulted. The mortgage broker informed us that we would be accepted for a 10% deposit but obviously at the moment that is not doable. The mortgage broker requested that we contact equifax as to why the application was declined. The only marker against us was that the electorial roll had not updated our new address yet. We have submitted an appeal in the hopes that someone will take this into account. Is there any hope or is a decline a decline? 

@candyrain93 When you say "mortgage broker" do you actually mean a whole of market broker or the Barclays mortgage advisor?

If you passed a Barclays DIP but declined on full application, there'll be a reason for it and your broker would normally know (or at the very least be able to make an educated guess) as to what the reason is. Did the bank-advisor / broker give you a reason? I don't see anything in your post to say that it's a no-go with all lenders at 95% LTV.

Also, AFAIK Barclays uses Experian/Transunion (when they can't match on Experian) not Equifax.

Candyrain93

Thank you for the replies. No we have not had any government loans or grants. @K_S please excuse my lack of knowledge  he was a mortgage advisor for Barclays. He said that it was a soft decline and that is something he has never seen before. He said that he was unsure as to why we where declined as affordability was good. I have submitted an appeal and should hear back within three working days. Hanging on to hope although from reading other posts it’s unlikely that the decision will change. 

Thrugelmir

The advisor will have no idea as the internal criteria that's been set for the product. Unsurprisingly Barclays appetite for risk and the amount of money that have for a 5% deposit will be somewhat limited. If there's a high level of demand then they can be highly selective as to applications they accept. 

lonibra

I hope you didn't have to wait 2 weeks for this "adviser" appointment. 

Don't give up, plenty of banks doing 95% LTV deals, you simply need to find the one that matches your circumstances, either by yourself or use an MB

ukri

Bank mortgage sales staff can be utterly clueless like this fella. Employ an independent mortgage adviser who can use any lender, not just one.

dunstonh

The general rule of thumb is to not use in-house mortgage advisers but use whole of market mortgage brokers.    They will filter out the lenders who wont consider you and find the best of the ones that will.

codingtutor

I went through a mortgage broker and was declined a DIP on 5% mortgage on an 80,000 house!.

Fast forward, I've since gone direct to HSBC and are now mortgage approved on a house for 230,000 with 5% deposit. 

My view is that my broker didn't fully check if I meet the criteria for the bank that declined me. In this case, it was that I didn't have 3 years of UK address history because I've been abroad. 

[Deleted User]

you can get bad brokers and you can get good in house staff.  The difference between a good broker and a good in house advisor is the ability to go to a 2nd option if it doesnt work out.   If you go to another in house advisor then you have to start all over again whereas a broker already has all the info needed to try the next choice.

5% mortgages are tricky.  Nothing is guaranteed and particularly with score based lenders we can check criteria as much as we want but a case might still decline and we will never find out the reason.   So best option at 5% is to use a broker and try only use lenders doing soft searches

Candyrain93

Hi all thank you for your comments. We hired a mortgage advisor and have been successful in securing a mortgage offer with a 5% deposit with Nationwide. I was ready to give up after Barclays declined but I am so glad I did not. Just wanted to provide an update to others reading this forum with the message to keep trying. If one lender declines it’s by no means the end of the line.