first national self cert mortgage application

diane_hopkinson

Hi everyone,
I am having a absolute nightmare and would like some advice!!
I am applying through a broker for a self cert mortgage to 1st national 3 year fixed rate self cert. Last week after weeks of my broker telling me not to worry everything will be fine i was turned down by beacon because i had 1 month where i paid 71% of my monthly mortgage amount instead of the minimum of 75% within 30 days. This only showed up on my statement and was never registered as an arrear. It also does not show on my credit report.
He has assured me that i will have no problems with this new application and the packager has also double checked and reassured him i fit the criteria set out. It has been passed on to the underwriter today and i am scared too death that i am going to be turned down again. My ltv is 50%, the house is valued at £285. Should i trust my broker and stop worrying?

minimike2

Could you just clarify, is the application for a mortgage with First National or with Beacon? And what perticular product is it...i.e which actual product scheme, near prime, light, ultralight etc. This should be on your KFI.

diane_hopkinson

Hi,
sorry if ive not been very clear. The mortgage i am applying for now is with 1st national and is the near prime self cert mortgage interest rate is 7.79% (or close) and the arrangement fee is £995. Basically i filled in a generic form and so when i was turned down by beacon my broker chose what he thought was the next option with my circumstances. I guess what i want to know is if a mortgage adviser with 15years experience is telling you he is very confident and the packager has also said the same would you stop worrying?

minimike2

That looks like Near Prime Plus product.

It doesnt allow any arrears in the last 12 months. Whilst the lender has not recorded your kinda half missed payment, it shows on your statement. FN may request the statement and they are likely to class it as a missed / late payment if they do see it. If this were the case, then you would shift products. Assuming it hasnt been in the last six months, you would fall onto thier Near Prime, which for the same product would be 8.04%. If you can tell me when the late payment was that would also help. Also was it immediately cleaered and I assume the mortgage is fully up to date now?

The thing that concerns me the most is that the broker is using a packager to get a First National deal. Packagers are notorious for slowing things down and I prefer to deal direct with the lender. First National launched a direct to Broker service not long ago. The only thing I can think of is that maybe you paid an admin fee when the application went in to beacon and now they are using a re-typed valuation for the First National applicaiton, so you havent had to pay the fee for it again. If thats the case then fair enough.

diane_hopkinson

Hi,
yes they are using a re type valuation so no additional fees!!
The late payment was 11 months ago and they are aware of it but because there is no arrears and i am totally up to date he says it will nort be a problem. I think the main reason he used a packager is because they are very used to dealing with 1st national and have close contacts with them. she has already unoffically run it past an underwriter. If the worse came to the worst and i dont get this mortgage what are my options, will they cascade it down to a deal i can get?

minimike2

Well if its through the packager because of the re-type then thats all good. The only reason I would ever use one would be to get a packager only product...but then in this scenario I would have done the same following a decline.

If it was 11 months ago then you should be ok with the near prime at 8.04% - You may be lucky and get through on near prime plus at the 7.79 - fingers crossed you do. They will cascade it to Near Prime though if they do decide to class it as a missed payment.

The good news too is that at your LTV FN do not credit score (but they do credit search), so if the debt to income ratio / affordability stacks up then you shouldnt have much of an issue getting it agreed with them, as long as it fits the rest of the criteria re CCJs / Defaults. (Max 3 Defaults in last three years, none in last 12 months / max 1 CCJ in last 3 years, none in last 12 months - bankruptcy, IVA and repo not accepted)

diane_hopkinson

That sounds pretty positive. Obviously my broker is fully aware of my credit history, in fact we got a copy of it before we applied for any mortgage. I have 1 ccj for £460 from jan 2006 and 1 default from 2003 for £106 which has been satisfied. He says that is ok, is that correct?
Im sorry to sound like a doubting thomas but i feel i have lost confidence in him because of the ist application being refused, especially as he was so confident!!

minimike2

Sounds like it should all be fine to me!

Beacon are declining a lot at the moment. They have also started to restrict the funds available to each packager on a monthly rolling basis. If your application went in towards the end of the month it is possible that they had already used thier months allocation of Beacons funds, which could have had an influence on the decision. I would have thought they would have accepted you on thier "Minor" scheme on a two year discount at 6.8% - you fit the profile, so its something else thats caused the decline I imagine. Could also be down to not passing thier affordability check, but they have a calculator online, so your broker could/should have checked this prior to submitting the applicaiton.

diane_hopkinson

Thanks alot, i will rest easy now!!
I will let you know how everything turns out too

diane_hopkinson

My application was put in right at the end of the month with beacon so i think this is prob the reason. The reason given for turning me down was that in 1 month i paid 71% of my mortgage instead of their minimum of 75%. I actually worked it out it it equates to about £4...which when i am putting down £142,500 into my next property on a 50% mortgage is abit annoying!!
I am well within the afforability checks and i dont have any other credit commitments so i was very surprised to be turned down. my broker was also very shocked and i think it has knocked his confidence abit too. Can underwriters turn you down for there own reasons or is it just a matter of you have to fit the criteria exactly..does personal opinion come into it?

minimike2

They can decline you for any reason that they see fit really. Underwriters are usually given a mandate on the amount of mortgage that they can underwrite to, which includes using thier own experience as well as policy.

Anyone with half a brain cell would ignore the £4......I suspect its down to the funding issue.