Can’t get DIP

JakeMM

Applying to get a DIP and failed the first run of checks, I think predominately to my other half having had no credit, or being on the electoral roll.

Rushed to sort this, and her credit score has jumped and is now above the U.K. average.

I have some credit debt, but have never missed a payment - so my score is high.

We’re looking at a studio property of £150k, with 15% down, leaving a £127,500 mortgage (divided by 4.5 = salary of £28,333 required).

My other half is currently part time, and on £13,000. I’m self employed. My two year average is £31,000, and has increased year on year. 

I don’t understand why we can’t get a DIP.

A couple of questions:

1) Is a DIP property specific? Or does this simply guarantee what size mortgage you are good for?

2) Even though we smash the affordability, is part time work a red flag?

K_S

@jakemm Is it a broker that's not able to get you a DIP, or a single lender or multiple lenders?

If the first, then they should be able to clearly tell you what the reason is. If the second (and the lender can't tell you why), then perhaps might be worth trying a couple of different lenders. If multiple lenders are declining you at DIP stage then it's definitely worth speaking to a broker with a copy of your Experian+Equifax credit reports to identify the issue and place you with an appropriate lender.

With a studio-flat additional criteria comes into the picture, so different lenders may have different criteria eg: some might not consider at all, some will require a minimum sq.ft, etc.

To answer your questions -

1) A DIP by itself is not property specific. However, if the DIP has a question about property type and construction (eg: how many floors on the block of flats) and what you key in is outside criteria, that could lead to a decline.

2) Not by itself, though it could play a small part in the lender "credit-scoring" (nothing to do with your Experian/Clearscore/CreditKarma scores) at DIP stage.

simon_or

OP, ignore the "credit score", that's meaningless as far as a mortgage is concerned.

Get an up to date copy of your statutory credit files and get them to a good broker to review.

Studios can be a bit tricky to get a mortgage on, so perhaps that's also a factor? Are the AIP forms asking you anything about the flat itself?

ACG

There is no credit score. Its something people buy into. 
Many lenders do credit score you, but they all do it differently and using their own scoring system. 

I could go into war and peace but ultimately if you are struggling speak to a broker. They will do the donkey work for you ans find you some options. 

JakeMM

It’s a studio above / in close proximity to a restaurant, so I don’t know whether the failing of the DIP is due to us or the property.

So far, we’ve been turned down by Skipton I believe and Halifax.

We’re with a mortgage broker. They did state that it would come down to valuer comments, but I expected that to happen with a full mortgage application, and not to have trouble at the DIP stage?

The flats are purpose built, separate kitchen, above 30m2, and right on the seafront - the location couldn’t get any better. The only issue is the restaurants. The block itself has had multiple sales in the last 5 years - so there’s recent data as to prices, and they’re obviously possible to sell on. Also, they’re share of freehold with the remainder of a 999 year lease.

Is it normal to go through lots of mortgage applications with a broker to find an acceptable one? Or is it always narrowed to 1 or 2?

I have nothing negative on my credit file. No errors, never a single missed payment etc. My other half has nothing negative, but not so much positive. She now has her first credit card, and she’s had a SIM card for a number of years.

My debt is around £16k, but joint salary is £44k, so minimum payments vs salary isn’t that bad. We’re looked at a 15% deposit, so I was hoping that would help as well. 

K_S

@jakemm If you've failed a Halifax DIP, it's almost certainly not to do with the property.

I don't want to second guess your broker but they should be able to tell you why you have failed the DIP as the lender system will give a reason when it's declined.

Skipton requires minimum 35sqm and min value of 150k (which is fine in this case) for flat above commercial but again I don't think this would come up at DIP.

Skipton_Building_Society_Representative

JakeMM said:

It’s a studio above / in close proximity to a restaurant, so I don’t know whether the failing of the DIP is due to us or the property.

So far, we’ve been turned down by Skipton I believe and Halifax.

We’re with a mortgage broker. They did state that it would come down to valuer comments, but I expected that to happen with a full mortgage application, and not to have trouble at the DIP stage?

The flats are purpose built, separate kitchen, above 30m2, and right on the seafront - the location couldn’t get any better. The only issue is the restaurants. The block itself has had multiple sales in the last 5 years - so there’s recent data as to prices, and they’re obviously possible to sell on. Also, they’re share of freehold with the remainder of a 999 year lease.

Is it normal to go through lots of mortgage applications with a broker to find an acceptable one? Or is it always narrowed to 1 or 2?

I have nothing negative on my credit file. No errors, never a single missed payment etc. My other half has nothing negative, but not so much positive. She now has her first credit card, and she’s had a SIM card for a number of years.

My debt is around £16k, but joint salary is £44k, so minimum payments vs salary isn’t that bad. We’re looked at a 15% deposit, so I was hoping that would help as well. 

Hi there,

Feel free to contact us via our social media channels and we can try shed some light on the decline for you Jake.