New mainstream up-to-100% LTV FTB product that requires less than 5% deposit

K_S

Koalah said:

K_S said:

Koalah said:

I commented on the other thread. I applied as met all the published criteria. Excellent credit score and report with Experian. Pay high rent in current area but am relocating so had been looking for rentals and struggling due to shortage. Plenty of homes to buy. Did their first calculator and was offered enough to afford one of the homes in area. Did the mortgage in principle application, for £25k less than what they said was max they’d offer. Was rejected. Said as a result of soft search with Experian. Rang Experian, no issues. Tweeted in response to guardian article and skipton responded to contact them as there were errors in calculator resulting in everyones application.
rang them and they said, sorry I failed their ‘internal scorecard’. I asked what that was when I’d passed everything else they published and they said they could provide no additional information as to why. Wished me all the best with my hunt for a mortgage.
so excellent credit score (just under the full 999), 9 year rental history no missed payments, used creditladder for 4 years to report rent to Experian, and still rejected.

@koalah Thanks for sharing your experience and sorry to hear about the decline.

Every mainstream lender does what is called "credit-scoring" for each application, every lender will have their own version of it. There are lots of different factors that go in to a 'scorecard', each with different weightages. It could include things that you expect - credit history - and lots of other factors that you might not expect, such as employment type/history, age, age of bank account, current account turnover, address stability, linked profiles, etc. etc.

As you would expect, lenders don't publicise what exactly goes into their scorecard (not even to brokers), so it's sometimes hard to say why an application failed a lender's credit-scoring though an experienced broker *should* be able to guess at what might have caused it. If there is nothing at all obvious, some lenders BDMs will dig into the details and help the broker with identifying the issue.

Good luck, I hope you're able to get the mortgage you need at some point!

My guess is age. I’ve had same bank account for 20 years, same address for 9 years. Most likely issues - I’m paid weekly, so if they were looking for my monthly pay amount, they wouldn’t see it as the lump sum. I’d been doing all the standard things to build credit over the years - getting a credit card and managing it, paying insurances monthly instead of upfront.
I’ll keep looking for a rental, and keep working at a side business alongside full time work to try to eventually fund outright. I’ve probably got more chance of that than getting a mortgage now.
There were a lot of downsides to Skipton’s product, including penalties and limits on overpayments. So at end of fixed 5 years at the interest rate they were offering, you’d still be at 98%, unless you found the right property that you could spend the overpayments on improving and developing it to increase its valuation.

@koalah Just for peace of mind for when it comes to applying for a mortgage again, I would suggest trying and getting to the bottom of the credit score fail. I don't know how the Skipton direct DIP process works but what I usually do for clients failing a high-LTV DIP with no obvious reason is -

- tweak the LTV downwards to identify the threshold at which it passes

- tweak the borrowing figure downwards in stages to see if it passes (for those lender DIPs which return a fail rather than a lower affordability number or give cryptic reasons for declines)

For example, if Skipton is happy to lend to you at 95% LTV but not at 100% LTV, then you know that it's only a borderline fail. If you get all the way down to 80-85% and it's still a fail, then there might be something more serious that is working incorrectly. For example, one of my clients with a perfect credit history was failing DIPs with any lender that used Equifax and we finally managed to identify the reason as the Equifax system using a different form of the address to what the applicant used, this is not uncommon for flat addresses. In other cases clients have had similar issues due to mismatched names.

Similarly with the borrowing figure, if the fail turns into a pass at some point, it could just be that any cc debt (even if its paid off in full every month) or insurance debt showing on the report is being taken as ongoing and reducing the max loan size.

I don't know if it is possible to do the above direct but hopefully there is. I would stress here that you should only tweak the loan size or LTV when playing around with DIPs and not other things like income, outgoings, etc. 

Koalah

K_S said:

Koalah said:

K_S said:

Koalah said:

I commented on the other thread. I applied as met all the published criteria. Excellent credit score and report with Experian. Pay high rent in current area but am relocating so had been looking for rentals and struggling due to shortage. Plenty of homes to buy. Did their first calculator and was offered enough to afford one of the homes in area. Did the mortgage in principle application, for £25k less than what they said was max they’d offer. Was rejected. Said as a result of soft search with Experian. Rang Experian, no issues. Tweeted in response to guardian article and skipton responded to contact them as there were errors in calculator resulting in everyones application.
rang them and they said, sorry I failed their ‘internal scorecard’. I asked what that was when I’d passed everything else they published and they said they could provide no additional information as to why. Wished me all the best with my hunt for a mortgage.
so excellent credit score (just under the full 999), 9 year rental history no missed payments, used creditladder for 4 years to report rent to Experian, and still rejected.

@koalah Thanks for sharing your experience and sorry to hear about the decline.

Every mainstream lender does what is called "credit-scoring" for each application, every lender will have their own version of it. There are lots of different factors that go in to a 'scorecard', each with different weightages. It could include things that you expect - credit history - and lots of other factors that you might not expect, such as employment type/history, age, age of bank account, current account turnover, address stability, linked profiles, etc. etc.

As you would expect, lenders don't publicise what exactly goes into their scorecard (not even to brokers), so it's sometimes hard to say why an application failed a lender's credit-scoring though an experienced broker *should* be able to guess at what might have caused it. If there is nothing at all obvious, some lenders BDMs will dig into the details and help the broker with identifying the issue.

Good luck, I hope you're able to get the mortgage you need at some point!

My guess is age. I’ve had same bank account for 20 years, same address for 9 years. Most likely issues - I’m paid weekly, so if they were looking for my monthly pay amount, they wouldn’t see it as the lump sum. I’d been doing all the standard things to build credit over the years - getting a credit card and managing it, paying insurances monthly instead of upfront.
I’ll keep looking for a rental, and keep working at a side business alongside full time work to try to eventually fund outright. I’ve probably got more chance of that than getting a mortgage now.
There were a lot of downsides to Skipton’s product, including penalties and limits on overpayments. So at end of fixed 5 years at the interest rate they were offering, you’d still be at 98%, unless you found the right property that you could spend the overpayments on improving and developing it to increase its valuation.

@koalah Just for peace of mind for when it comes to applying for a mortgage again, I would suggest trying and getting to the bottom of the credit score fail. I don't know how the Skipton direct DIP process works but what I usually do for clients failing a high-LTV DIP with no obvious reason is -

- tweak the LTV downwards to identify the threshold at which it passes

- tweak the borrowing figure downwards in stages to see if it passes (for those lender DIPs which return a fail rather than a lower affordability number or give cryptic reasons for declines)

For example, if Skipton is happy to lend to you at 95% LTV but not at 100% LTV, then you know that it's only a borderline fail. If you get all the way down to 80-85% and it's still a fail, then there might be something more serious that is working incorrectly. For example, one of my clients with a perfect credit history was failing DIPs with any lender that used Equifax and we finally managed to identify the reason as the Equifax system using a different form of the address to what the applicant used, this is not uncommon for flat addresses. In other cases clients have had similar issues due to mismatched names.

Similarly with the borrowing figure, if the fail turns into a pass at some point, it could just be that any cc debt (even if its paid off in full every month) or insurance debt showing on the report is being taken as ongoing and reducing the max loan size.

I don't know if it is possible to do the above direct but hopefully there is. I would stress here that you should only tweak the loan size or LTV when playing around with DIPs and not other things like income, outgoings, etc. 

thanks - I've spoken to Experian and it seems that they've broken my address record. I've been at address 9.5 years on electoral roll but for some bizarre reason in 2020 the council removed middle initials when sending to Experian so Experian have created a new address record. So if a check was looking for 9.5 years at address that could be the reason. Have raised a complaint and all Experian have said is get a mortgage lender to do deeper checks to overcome the 'computer says no'.
currently reporting under GDPR the right of having info correct