Nationwide mortgage... Guarantor??

lgirl_2

Hi there,

I posted a couple of days ago seeking some advice. This is my original thread (hope the link works):

http://forums.moneysavingexpert.com/showthread.html?t=889591

We have sought advice from a broker but are trying to find another once as we don't think the first one we saw is suitable.

We are, however, now thinking of going back to nationwide as we like the rate etc they offered us originaly, but are still worried about the mortgage being accepted due to the trust deed (IVA) my husband had 4 years ago and our credit rating. My parents have offered to go guarantor for us if it will help. They have been with nationwide for over 30 years and have an excellent credit rating and have a very large amount of assets. My question is, will this help us?? We can borrow enough easily with nationwide, it is just the credit rating we are worried about. We have already got an agreement in principal with them (would they have had to do any credit checks on us for that?) It is just the formal application we are worried about.

Thanks in advance!!

lgirl_2

Can anybody shed some light on whether my parents acting as guarantor would help us, or is the decision still based on me and my husbands credit??

Many thanks in advance!!

DaiGonzales

Copied directly from the Nationwide website:

Guarantor Information

Nationwide offers the following products for customers with guarantors, where there is insufficient income:

• New mortgages for house purchase
• Further advances for home improvements
• Remortgages provided past payment history shows a perfect payment record
• Transfer of equity cases

If an application has been declined for any other reason, a guarantor does not automatically make an unsatisfactory application acceptable.
This can not be done online, please visit your local branch for more information.
Guarantors should get legal and financial advice before signing because they can only be released from their responsibility when the owner is in a position to cover the entire mortgage, or if the loan is surrendered. With any important changes in circumstance for either the owner or the guarantor, such as unemployment, then the lender must be notified, as this will change the basis for the loan.

lgirl_2

Ah, I see. Thank you. A guarantor won't really be of benefit to us then really will it. Do you know what Nationwide are like with lending? Are they notoriously strict, or do they take other aspects into accound when doing credit checks?

Would we have already been credit checked when we got our offer in principal?

Thanks!!

rdsmortgageman

Hi

As an adviser, I would have to say that they are unlikely to lend if your husband has had an IVA.

Did you disclose the IVA at decision in principle stage? They would have had to have carried out credit checks on both you and your guarantors, so it should have shown up.

You might find that it rears it's ugly head at application stage. What is the reason for using guarantors?

lgirl_2

We haven't actually used guarantors yet, it's just something we have been thinking of to help us secure it. We explained to nationwide that it he went through a scottish trust deed for three years which was completed last summer. This is basically an IVA so I have been told. The mortgage interviewer said that there is no way that she can tell if it would go through or not, we just have to wait and see. Would having a 10% deposit help us more with the trust deed history??

rdsmortgageman

It really does depend on what the circumstances are. If the trust deed/IVA is finished, some lenders will be happy to lend on normal circumstances. Others will need 15%-25% deposit.

Guarantors are mainly used for people who can't quite afford to borrow the amount at the moment, but are likely to earn more in future i.e. students etc.

If you can afford to borrow on your own, I wouldn't use guarantors as lenders want them to jump through hoops nowadays.

Lloyds TSB used to be good with discharged IVA's and also guarantors. Haven't used them for a while as service is poor.

lgirl_2

These are our financial circumstances (copied and pasted from my 1st thread): What do you think??

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He earns £40K and I earn £27k. I have a loan of £8k and £1600 on a credit card and always make my payments on time with no problem (apart from one late payment on the credit card once when I was on holiday). I pay of more that the minimum each month. I think my credit rating should be pretty ok, but not perfect.

My hustband went through a Scottish Trust Deed which started in August 2004 and was completed in August last year. He has since been alowed debit cards etc but we are really worried that this may affect our chances of getting a mortgage in the current climate. He has a student loan of about £2k of which he pays about £50 off a month.

We bank with nationwide so have got a mortgage agreed with them in principal. We can borrow up to £269,000 but only want to borrow £218,000 as we have a 5% deposit (with extra for fees etc) saved. The rate we were quoted was 6.45% for a three year fixed rate mortgage, which we are happy with as we can very comfortably afford the repayments. I have made an appointment to go back this week to formally apply and be credit checked, but this is where we are really worried that we will come unstuck. If we get rejected our chances of finding another lender are probably very slim I would think?? We are now worried that we should have found a broker or independant mortgage advisor first to advise who would most likely give us a mortgage. We are wondering how lenient Nationwide are and if anybody can give us some advise on what the likely outcome would be?

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Thanks!!

rdsmortgageman

Firstly, get into Nationwide and apply ASAP. The sooner you apply the sooner you will know. Nationwide are best for 95% as no HLC. I will do a bit of looking about for you, but will not be able to post back until tomorrow.

lgirl_2

Brilliant. thank you !! We appreciate this so much!!

I have an appointment with them at 9am tomorrow. Do you think I should allow them to proceed with the formal application? We haven't had our offer accepted yet on the house though, we need to put a higher offer in. We have a lot of leeway so can go up quite a bit so it shouldn't be too much of a problem having an offer accepted (I hope).

Should we apply tomorrow or hold off a while??

Thank you!!

lgirl_2

Yes, they will make it up to 10% if we need it. Will this higher our chances of getting approved by nationwide?? We wanted to avoid asking them for help if at all possible as the property we are hoping to buy is a renovation and they will be assisting us financially with it, and will also have to help us if we are required to come up with a retention fee for the property, which we have been told we might have to. They have made it clear that they are very willing to help us if we need it, I suppose it's just pride which makes us want to do it on our own. If it's the choice between getting approved and not getting approved then we will take it.