Low Agreement In Principle on high income?

SilverSix

Evening All,

O/H and I are looking to buy our first home together but have been surprised by low AIP's on our high combined income this evening.

Having used Nationwide's 'what could I borrow' calculator which returned up to £825k, their online AIP was barely half, £340k combined and £325k on highest income alone. Natwest were slightly higher at £425k

We are looking to borrow £450-500k with a £525k deposit.

LTV approximately 45%. 
Combined gross income approximately £150k (£110k + £40k)
No debt, credit cards or dependents and low travel outgoings.
Net combined monthly income approximately £8k 
Est. mortgage payment - £2.6k.

This doesn't seem to make a huge amount of sense though I understand the caution and restriction lenders are now under.

I'm optimistic that when reviewed by a human and not confined to an online assessment that we shouldn't have any issues borrowing what we'd like.

Any similar experiences here?

Thanks.

housebuyer143

I suppose it depends what income sources you have put down as some might be counted in full while others won't, i.e bonuses etc. Non- guaranteed income.
Potentially because the are higher rate they are considering the net salary as well.

kingstreet

Do you have a mortgage? Did you enter it as "to be repaid?" If not, that's the usual reason. Otherwise get credit files (perhaps checkmyfile for all three CRAs) and ensure all data is correct.

SilverSix

kingstreet said:

Do you have a mortgage? Did you enter it as "to be repaid?" If not, that's the usual reason. Otherwise get credit files (perhaps checkmyfile for all three CRAs) and ensure all data is correct.

I did, approx £50k. 

Selling one property, net £450k proceeds with a further £75k towards deposit. 

£10k of income related to bonuses, the remainder is guaranteed income. 

ACG

Have you cleared other debt recently? It may be picking that up. 
Have you missed any commitments off? 

Its difficult to say for sure without seeing a credit report and everything else. There will be a reason, its just finding out what it is. 

SilverSix

ACG said:

Have you cleared other debt recently? It may be picking that up. 
Have you missed any commitments off? 

Its difficult to say for sure without seeing a credit report and everything else. There will be a reason, its just finding out what it is. 

We've included approx £20k of credit card debt, the cash for which is sat in a high-interest account and had marked the balances as being repaid in full before the new mortgage would start.

Nothing cleared recently as it's bringing in a nice sum every month in interest 

On the MSE Credit Club we have one rating of 985 and the other is unknown (not in the club) but does have a regular good credit history of using and clearing a card in full each month.

ACG

Ah, thats probably the reason with Nationwide then. 
They are a lender who will not ignore debt that is being cleared. Unless it has already been paid off prior to application and updated on the credit report, they will assume it remains. 

Did you declare it on the Natwest AIP and then tick to say it will be getting cleared? If not, that will explain it. If you did then it may be something else. 

Speak to a broker, I am sure it can be resolved. But its one of those things where it needs someone to actually look at it I think. 

SilverSix

ACG said:

Ah, thats probably the reason with Nationwide then. 
They are a lender who will not ignore debt that is being cleared. Unless it has already been paid off prior to application and updated on the credit report, they will assume it remains. 

Did you declare it on the Natwest AIP and then tick to say it will be getting cleared? If not, that will explain it. If you did then it may be something else. 

Speak to a broker, I am sure it can be resolved. But its one of those things where it needs someone to actually look at it I think. 

Thanks, yes, I did click it would be cleared prior to mortgage commencing.

I agree, I think it just needs some human logic applied.

Edit: Update, our broker had no issue securing an AIP with Nationwide on both incomes for £600k.

JustMe18

Ours was twice higher after actually a human reviewed it.