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    • terringo
    • By terringo 12th Aug 17, 7:59 PM
    • 1Posts
    • 0Thanks
    Yorkshire Building Society 5% Mortgage
    • #1
    • 12th Aug 17, 7:59 PM
    Yorkshire Building Society 5% Mortgage 12th Aug 17 at 7:59 PM
    Hi there,

    I want to give you my review of the mortgage application process for Yorkshire Building Society (YBS).

    During the research I did on mortgages, I found a lot of conflicting information from various threads and forums and as a first time buyer I found that the more I read, the more worried I got.

    To cut a long story short, my partner and I have recently had our mortgage approved and its been extremely straight forward. I was rated as "fair" by experian and equifax and my partner "good" - despite neither of us having any late payments or defaults. She has no debt whatsoever and pays her CC balance off in full each month and I have a CC and a car on finance, with plenty of disposable income. We're both employed, permanently, full-time, been with the same employer for over 3 years and we earn combined salaries of 95,500PA.

    So the first lesson I learnt here was don't pay any notice to the ratings provided by Experian and Equifax.

    We also did not do any preparation on the lead up to applying for the mortgage; we spent as we normally do, went to the pub twice a week, ate out a couple of times a week and led a comfortable lifestyle. A month before applying I borrowed 20k to buy a car (at a ridiculously low 3.6% from halifax) and a couple of months before I switched from 2 x 0% CC's to 1 x 0% CC.

    I first got 2 x decision in principles from 2 x banks; Halifax and Barclays. These are soft searches and did not affect our credit scores. Both said we can borrow up to c480,000.

    We only wanted to borrow c350-375k so at this stage we felt comfortable we would pass an affordability check.

    YBS had the cheapest 5% deposit mortgage. And this is what scared us, as the forums said that YBS were extremely strict and didn't like to give out 5% mortgages. In our case, this wasn't true.

    We found a house, for 375k. Applied for the decision in principle on-line, which was approved in seconds (this does do a credit check). We then went on to apply for the full mortgage which was then approved again. So we are purchasing a 375k house with a 5% deposit (19k).

    5 days later a lady called, very pleasant, and asked that we send them 3 payslips and our latest bank statement. Given that we had electronic versions of our payslips and bank statements we could simply emailed them, nothing needed to be verified. We complied and a week later they contacted us to say everything was approved pending the survey results.

    They did 1 credit check, with Equifax and a soft search with Experian which is noted as an identity check.

    We're now awaiting the results from the survey which happened on the 10th but so far so good. The lady said as long as the valuation comes back OK then the full mortgage offer will be approved and we can move to exchange.

    I must stress that my partner and I have no children and have plenty of disposable income, so maybe if we were borrowing closer to our maximum they may have delved deeper into our finances.

    I hope this helps others out there feel confident about applying for a mortgage!
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    • venison
    • By venison 12th Aug 17, 10:50 PM
    • 2,176 Posts
    • 2,322 Thanks
    • #2
    • 12th Aug 17, 10:50 PM
    • #2
    • 12th Aug 17, 10:50 PM
    Personally IMHO 5% deposit mortgages are what got us into the last mess I'm amazed that on joint income of 95k you couldn't save another 5%
    Ex Board Guide
    • Thrugelmir
    • By Thrugelmir 12th Aug 17, 11:15 PM
    • 58,964 Posts
    • 52,284 Thanks
    • #3
    • 12th Aug 17, 11:15 PM
    • #3
    • 12th Aug 17, 11:15 PM
    Personally IMHO 5% deposit mortgages are what got us into the last mess
    Originally posted by venison
    Was a combination of self certified incomes and interest only. Allied to lax underwriting. Where in house advisors had sales targets to achieve. With a fundamental switch to mortgages being granted on a repayment basis. The risk to lenders diminishes. With the borrower shouldering more of the potential down side.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Toonsy
    • By Toonsy 13th Aug 17, 5:48 AM
    • 64 Posts
    • 35 Thanks
    • #4
    • 13th Aug 17, 5:48 AM
    • #4
    • 13th Aug 17, 5:48 AM
    Personally IMHO 5% deposit mortgages are what got us into the last mess I'm amazed that on joint income of 95k you couldn't save another 5%
    Originally posted by venison
    It's not the product that was the issue - it was the lax regulation and skant forward thinking (of borrrower and lender) which was the issue.

    For instance I took out a NR Together product because at the time it was the most workable solution for me (I couldn't save a deposit because I was paying debt so paid it all off with the loan) but I do recall asking my MB at the time about if his prices dipped and I distinctly remember him saying "that's not likely to happen" to me. Two months later the financial crisis started and my house value dropped and I was in negative equity but it was no problem - peaks and troughs - so I just sat it out.

    Now at least someone has to be 'stress tested' so theoretically this should flow through to less defaults when rates rise as there should in theory anyway be less defaults.

    In theory....
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