Panicking I’ve messed up our mortgage application – any hope?

Wandering_wizard

I think I may have completely derailed our mortgage application, and I could really use some advice, reassurance, or even just shared experiences.

We do have a broker, and I will be discussing this with my husband and then the broker… but I’m still building up the courage. I may need 24 hours to prep myself up before I can face that conversation. He’s going to be very angry – understandably – so I think I’m just looking for some perspective to calm my anxiety before I tackle it.

Income:

• Me: £47,000
• Husband: £120,000
• Joint: £167,000

We weren’t planning to move just yet, but our dream house came up in an ideal location. Our offer of £800,000 has been accepted and our house has sold STC. We have around £200,000 equity in our current home, so we’d be borrowing at roughly 80% LTV which mortgage broker said would be more than fine (at the time..!)

Because this happened sooner than expected, we still have some outstanding debt and hadn’t fully “got our ducks in a row,” although we’ve reduced a bit bit over the past few weeks.

Current debts:

• Me: £1,300/month (hire purchase+loan, ~2 years remaining). This is tied to an asset that could be sold to clear it if needed, but ideally we’d prefer not to.
• I also recently cleared another £400/month commitment.
• £7,000 credit card balance (to be cleared within 1–2 months).
• Husband: £9,000 on an interest-free credit card (also to be cleared in 1–2 months – only still there because it’s interest-free).

By completion, take-home pay would be £7,800/month vs ongoing commitments would be £1,300/month (or £0 if we sell the asset).

Credit history:

A few years ago (around 2019/2020), I had some financial struggles on a drastically lower income (20k) and missed several car payments. The lender suggested increasing payments to catch up, but I didn’t realise this would show as a long period of missed payments. The last late marker was July 2022 (actual missed payment November 2021).

Since then, I’ve had high credit utilisation at times but hadn’t missed any payments… until recently.

Between December and February, two payments (from a separate account app I couldn’t access after getting a new phone) didn’t go out on time. I only realised in March when I regained access and found I was about a month behind. I’ve since caught up, and March/April payments were on time.

However, this has resulted in:

• 3 late payments on 2 accounts (6 in total across 3 months)

These didn’t appear on ClearScore (which I check regularly) so I assumed I’d sorted them in time, but I’ve just seen them on Credit Karma… and honestly felt sick.

My account conduct also hasn’t been great recently (overdraft usage etc.), mainly because I wasn’t expecting to apply for a mortgage so soon, but lessons have now very much been learnt.

Partners credit history is perfect, no bad marks and perfect account management.

Mortgage situation:

Our broker submitted a DIP with Nationwide. It was initially referred, but then came back as a “subjective accept” once we confirmed we’d clear certain debts. However, the amount offered was lower than expected based on affordability alone – which I now suspect is due to my credit file (including the recent late payments).

Neither the broker nor I were aware of those late payments at the time of the DIP but they would have been there on the soft search.

I’m now certain that a full application will be declined based on my credit history regardless of the DIP.

We could potentially apply in just my husband’s name, although affordability would be tighter. Most major bank calculators suggest he could borrow just over what we need, but we won’t know for sure without another DIP.

We also wouldn’t be able to go back to Nationwide due to the joint DIP already submitted.

As a last resort, we could increase the deposit by selling assets.

So…

• Has anyone been in a similar situation?
• Am I right in thinking a joint mortgage is likely off the table now?
• Is there still a realistic chance of approval in my husband’s sole name?
• How accurate are affordability calculators, assuming a 20% deposit and debts cleared?

At this point I’m honestly just trying to stop myself spiralling before I have the difficult conversation.

And if I suddenly stop replying… assume I’ve been murdered!

El_Torro

It's not clear to me what you have or haven't done during your mortgage application. Are you saying you didn't declare your missed payments from 2022? Since it was only 4 years ago they will still be on your record. I'm not sure it would automatically mean that the mortgage offer is withdrawn, though that is a possibility. The recent late payments for your mobile phone won't help either.

I would be surprised if you could get a mortgage of £800k on your husband's income of £120k. That's 6.7 times his income. Higher incomes do tend to allow for higher multiples though. Your broker should be able to clear this question up quickly.

I wouldn't put too much stock in affordability calculators, ultimately each lender will decide for themselves what criteria to use.

Stay calm, be honest, and hopefully the outcome won't be as bad as you fear. Hopefully your husband is also more understanding than you seem to think he will be.

ACG

The reduced loan amount wont be down to your missed payments I dont think.

Speak to the broker.

80% LTV with a couple of late payments… It should be possible to overcome. Get a copy of your credit report from checkmyfile - this has all 3 credit reports. The issue with nationwide is they use one report at DIP and another at application.

You MIGHT have to go away from the high street, but thats not a definitive all things considered.

Dont worry. There will be a solution. It might cost a little more, but nothing major.

Wandering_wizard

https://forums.moneysavingexpert.com/discussion/comment/81962587#Comment_81962587

Mortgage required is 600k - so exactly 5x his income, which coincidentally is what a lot of calculators are coming out as, some marginally more, but it will be tight.

Later ones declared, most recent 6 not as I’ve only just found them on my credit record

Wandering_wizard

yes I looked at checkmyfile earlier - the late payments are on 2, but not on the third.

The soft search is visible on credit karma account (where the late payments can be seen), but I can’t yet see it on clear score.. so I assume they soft checked a report that has the recent missed payments?

ACG

Nationwide might be including that recently cleared £400 pm commitment.

Has your broker included it on affordability (and ticked to say it will be cleared)? That might be what is affecting the mortgage amount.

Wandering_wizard

https://forums.moneysavingexpert.com/discussion/comment/81962875#Comment_81962875

All I know is a DIP was submitted, and wasn’t an instant decline or accept. We were then requested to send over details of all unsecured loans and credit. I was told “credit and affordability passed” which is a little odd because if they passed why the conditions?

Nationwide then eventually came back and said we can give a DIP on the condition that monthly payments are reduced to X amount, which is fine. (400pm was instantly cleared to meet that condition) DIP amount that came back is above the amount we need, but now I have my recently discovered late payments to worry about (which should have been picked up during the soft search.. but I’ve read a lot of forum posts of people being declined at full app for a lot less!)

ACG

There is no exact science.

You have good incomes, decent deposit and the arrears are relatively minor (but recent).

I am not sure Nationwide would be my first port of call, but as your broker did not know about the arrears, I suppose there is no harm in carrying on.

Speak to your broker. They can be looking for a Plan B.

I know it is easy for me to say this, but dont worry. Most of the cases I do are adverse. A few late payments is pretty tame. I have a case which went in today - 90% LTV, arrears on a loan - 5.15%. At 85% or under we could have got him a DIP on the high street.

I cant guarantee nationwide will accept you. But if they dont, there will be a Plan B and Plan C and thats before you start looking away from the high street.

Wandering_wizard

https://forums.moneysavingexpert.com/discussion/comment/81962944#Comment_81962944

The amounts of the latest late payments were quite high though which I believe has an impact? One payment was a £500pm loan, the other was £215 CC. I’ve since set up a standing order, but that doesn’t help me now.

I’ve also noticed I got a bounced DD last month - I left £60 available in the account to pay for pet insurance… not realising the premium had gone up to £94 as it was the first month of the new renewal.. which is frustrating as I had plenty of funds in a different account. Was paid the next day when I realised (no late marker, but will be visible on bank statement if 3 months need to be supplied)

ACG

It probably will.

Stop reading the internet. Honestly you have no idea whether what you are reading is right, wrong, dramatised, half truths etc. At 80% LTV there is a good chance nationwide wont even ask for bank statements for example.

You have a mortgage broker, speak to them. They are not going to go running to your husband to get you in trouble. They might not be openly trying to keep it a secret but get your information directly from the person who knows everything about you rather than some potentially iffy information off the internet.

ChatGPT for example is regularly wrong or not completely correct. Its like if you google a medical symptom, your going to think you will be dead in 6 months. This is the same principle.

I cant really say much more without just repeating myself. You have a paid professional there to help you. Speak to them. I would feel like I had let my customers down if they felt they could not come and talk to me.

RelievedSheff

Try not to panic and let your broker do their job.

As above there will be other options if Nationwide decline this application.