FTB - mortgage may be pulled - a story for now!

emujuice

Hey all,

a few of you read my post a few days ago about a house we liked and not being able to borrow enough for it (although most of you didn't like the house we had in mind!)

I just thought I'd give an update, which has surprised us somewhat - but probably isn't a shock to most and is most definitely an indication as to what is happening and what will now happen to the housing market.

I'm on £29,500 and we wanted to borrow £133,000 for a £148,000 house. 2 months ago this was fine and we had a choice of mortgages and went for Norwich and Peterborough Building society which was 5.25% for 1 year switching to +0.65% BBR for life, with no fees and free valuation. Obviously it was good value.
Over the last 2 months NPBS have come back to us repeatedly to ask for more info (references from work, prove that credit cards are clear etc...) Last time we talked they said they'd only lend us £125,000 - this was a problem obviously, but we had room to try and drop the purchase price and borrow from family. Today they have said they might not lend us anything!!! This is 7 weeks after the application - suddenly they've decided that an unpaid phone bill from 4 years ago on my DH's credit record matters, and that we're expats - because we've been out of the country for 18 months. They knew all this at the start, but only NOW is it a problem. My credit score is perfect btw.

So anyway, we're not sure what to do next, we may wait for a bit, but since there don't seem to be any good alternative mortgages on the market at the minute, even borrowing less is going to cost us more!!

Just a cautionary tale - obviously we're slightly more complicated then most borrowers, but I've been employed for 3 years now, have a doctorate, a 5 year contract and I'm struggling to get a mortgage - even with a 10-15% deposit!

We're trying to find out if we can borrow much less at the same rate (look for 2 beds instead of 3 etc...)

Ho hum, looks like the descision whether to wait or not might be out of our hands, but I am worried whether any house price drop will be offset by huge increases in interest rates and arrangement fees - bah!

:-(

PS if anyone knows of any good rates still out there I'd like to hear! HSBC looking strongest at the moment.

mpsavuk

Hopefully the mortgage experts on here will advise you soon. My own comment is just to say that it seems to me that lenders are looking for any excuse not to lend at the moment. The slightest error, omission, mistake or default means the application is rejected.

Obviously you are not alone in your struggle.

Dylanwing

There is a whole market out there, and there are still lenders who are interested in FTB's (After all, is that not why Mr Bean has made £50Bn available?). Talk to a whole of market mortgage advisor and see what they can find you.

emujuice

hi guys,
thanks for the words of encouragement. We saw a lovely little house today for £115,000 (arranged viewing before we were told we might not get the mortgage). It's far too small for us long term, but would be ok for just the two of us. If we can get a mortgage for £95,000 or so (3x my salary) then perhaps there is somewhere for us to live
We'll see what HSBC say, they do have a good rate and are still doing large loans according to their online calculator.

poppy10_2

emujuice wrote: »

It's far too small for us long term

Why buy it then? You'll almost certainly be in negative equity if you have to sell within the next couple of years, and will then be stuck there.

UK007BullDog

You wanted more than 3 times your salary. It was no wonder they declined. Max you can borrow is £100,000.

Also speak to a broker as they know which lenders are willing to lend.

emujuice

Thanks for the comments. No, we're not going to buy the small 2 bed house, but we needed to see what was out there that is 3 x my salary.
Sorry bulldog, but I'm not sure I understand your hostility. We applied for this mortgage 2 months ago and they assessed me on affordability (no kids, no debt, good credit score and good job) and found that borrowing more than 3 x was ok - after 8 weeks of dragging it out they've changed their minds - understandable in this climate - but it will affect the mortgage if FTBer's with 15% can't get a mortgage. The point of this not that they won't lend us enough, bu that they might no lend us anything!

herbiesjp

Yours choices may be limited, but you may still find some lenders willing to agree that mortgage amount for you

The phone bill and the ex-pat scenario should be fine placed with the right lenders - I've had problems with N&P before and they do not seem to be too "helpful" in overcoming issues (and that was before the credit crunch hit)

emujuice

hi all,
just an update.
N&P finally came back to us today - saying no - based on the expat senario and also because they now only do 75% mortgages! took 2 months in total to get a decision. Bah!
But we have been into see HSBC and they seem happy to lend us what we need. Obviously it needs to go to their underwriters - but should be ok - fingers crossed. Shame about the £999 fee that can't be added to the mortgage!