Skipton Track Record decline

6ft2oflovely

hi

My husband and I asked our broker to try and get an agreement in principal for a Skipton Track Record mortgage. It was declined… with no specific reason.
Some information about us:
we live in Scotland

We have an annual income of £70k

Personal loan (taken for a car purchase) £212 monthly and £11k to pay

Credit card debt is approx £11k between us

we have no missed payments for any bill or rent

current Rent is £882p/m

We were looking at a flat with a home report price of £115k and worked out with Skipton’s higher interest fixed for 5 years it would be approx £797p/m

anyone who is a broker or have an insight give anymore info?

kingstreet

Criteria;-

What are we offering?

• Up to 100% LTV mortgage for current renters, who haven't owned a property in the last 3 years and can demonstrate a track record of affordability of ALL monthly rent for a minimum of 12 months in the last 18-month period.
• If there is a deposit, we are happy to consider even if it’s gifted. If the client has a deposit of 5% or more, they should seek our standard products as Track Record is designed for >95% lending.
• After 2 years of helping renters into their homes we have made various improvements to the way we calculate affordability which should help more customers step up on to the property ladder. This means in some circumstances we will offer loans which have monthly payments up to 120% of the client’s monthly rental payment (calculated as a mean average over the last 6 months).
• Max term 40 years.
• Max LTI 4.49 or 5 if income for a sole application is >=£50k or for a joint application >=£60k.

6ft2oflovely

https://forums.moneysavingexpert.com/discussion/comment/81866385#Comment_81866385

yep, we meet that criteria don’t we?

kingstreet

Here's the elegibility;-

Who is eligible?

Your clients might be eligible for this product if:

• None of the applicants has owned a property in the UK in the last 3 years.
• Each applicant is aged 21 or over.
• If they have a deposit, it must be less than 5% of the purchase price.
• In addition to standard lending policy relating to missed payments and adverse credit, each applicant must have no missed payments on debts / credit commitments (e.g. mobile phone bill) in the last 6 months.
• They are looking to borrow up to £600,000.
• They have proof of having paid rent for at least 12 months in a row on a UK property, within the last 18 months.
• They have 12 months experience paying all household bills within the last 18 months.
• They are not looking to buy a property in Northern Ireland or Isle of Man.

Sole applicants:

• They've paid all rent for 12 months in a row, within the last 18 months. Depending on circumstances, we may also want to see proof of payments of household bills.

For joint applicants (up to 4 people):

• They can prove that all rent has been paid either by one applicant or collectively for 12 months in a row, within the last 18 months.
• If your clients have been renting separately, they can prove that they have paid all their rent.
• In either case we may also want to see proof of payments of household bills.

6ft2oflovely

https://forums.moneysavingexpert.com/discussion/comment/81866436#Comment_81866436

thanks, we read through all of this and meet the criteria.
we have no adverse credit on our reports, we have no missed payments, we have jointly rented this house for 8 years and haven’t missed any rent payments.

🤷‍♀️

MWT

Has the credit card debt been going up or down over the last few months and what percentage of your credit card limits does it represent?

6ft2oflovely

https://forums.moneysavingexpert.com/discussion/comment/81866486#Comment_81866486

it’s a mixture of up and down as we utilise balance transfer 0% offers etc, but pay over the minimum payments.
credit utilisation on the credit limits is approx 70% just now.

MWT

https://forums.moneysavingexpert.com/discussion/comment/81866504#Comment_81866504

With high utilisation and no signs of it just heading down, I'd be inclined to ask your broker if they feel that may have played a part in the decline perhaps?

ACG

Is your £11k on credit cards hitting a large proportion of your credit limits? ie are you at £11k with a limit of £12k? That could be a problem. Likewise £11k with limits of £40k could be a problem.

Affordability is fine, credit reports clear, history of paying similar rent, everything is as you would want it to be. The only thing that stands out is the amount of debt you have. Its not huge and certainly not for your incomes, but there is nothing else that I can think of.

You have to remember this is 100% LTV. They are going to fussy.

6ft2oflovely

https://forums.moneysavingexpert.com/discussion/comment/81866996#Comment_81866996

I did an actual calculation and it was at about 75% utilisation….
think we’re going to just have to spend 2 years paying off the credit card debt and seeing where we are then….

ACG

75% doesnt seem too bad. If you are 90% I would have seen it as a bigger issue.

Maybe you can revisit it a little sooner, I dont think the debt would need to be cleared. Maybe just less credit checks from swapping them around and lower balances overall.

Its difficult in cases like this as there is no specific reason. Its just one of those things where its everything combined not really hitting the threshold which in fairness on a 100% mortgage would need to be very high.

Do you have family who could put some money into a savings account for 2-3 years? Or would accept a charge over their property for 2-3 years? If so, there might be other options for you.