£4,200 net income per month and can't get a mortgage!

lilygirl85 · 3 April 2012 at 8:26PM

My fiance and I both have good, stable jobs and we earn £4,200 (net) between us a month.

We have found a beautiful house that we would love to buy and have a 10% deposit, but have been refused a mortgage with NatWest on the basis that our credit rating is not good enough. Having checked our credit ratings, we are both at around 915 out of 999 on Experian. I should add that my fiance's credit report came back completely clear except for a single missed payment on a £12 phone bill in January 2007 (!).

NatWest would not give any reason for their refusal other than that "the system said no". We have both banked with NatWest for over 15 years and are so disappointed that we have been refused without any real consideration.

We are now worried about applying to other lenders as we have been told that it will affect our credit rating and will make us unattractive to lenders.

NatWest have said that they will only consider us if we can increase our deposit to 85%. Frankly, that sounds ridiculous because it is not going to change our credit rating and shouldn't really change their perception of our risk level. Having to save another 5% (i.e. in excess of £8,000) is going to take us an age because we are getting married in 12 months and wanted to be in our home before hand...

Any advice would be gratefully received.

opinions4u · 3 April 2012 at 8:35PM

they will only consider us if we can increase our deposit to 85%. Frankly, that sounds ridiculous because it is not going to change our credit rating and shouldn't really change their perception of our risk level

Yes it should. It reduces their potential loss in the case of them having to repossess.

Having to save another 5% (i.e. in excess of £8,000) is going to take us an age because we are getting married in 12 months and wanted to be in our home before hand...

Make a choice.

Welcome to the real world.

lilygirl85 · 3 April 2012 at 8:43PM

Not really a case of making a choice here I'm afraid as deposits are all paid for the wedding. Unfortunately we did not realise that we would need more than a 10% deposit - we were told by two separate customer advisors and a mortgage advisor at NatWest that we would be absolutely fine to get a 90% mortgage on our incomes and with the savings that we currently have with them.

I understand what you say about us posing less of a risk with an 85% mortgage, but I don't really see how a couple with our income can be seen as a real risk. My fiance is an equity partner in an accountancy firm, we both have life insurance and health insurance and have someone willing to act as a guarantor.

If a couple earning what we earn can't get a mortgage at 90%, who on earth can?

Dave_Ham · 3 April 2012 at 8:43PM

Natwest are not super keen to lend at the moment.

There are 90% lenders out there that are lending. Recommend you find a decent mortgage broker, or alternatively have a good look through these forums and you may find some useful answers.

From what you have said, this sounds like it should be an easy placement...

Good luck

fiesta04 · 3 April 2012 at 8:50PM

You need to go to a Whole of Market Mortgage Broker as I am sure they will find you a lender.

F4

ACG · 3 April 2012 at 8:52PM

Ther customer advisors are not mortgage advisors.
Their guess is probably only marginally better than yours.

90% mortgages arnt the easiest thing to get at the minute.

If you cant save up another 5% then your probably best seeing a mortgage advisor.
How many times your income are you looking to borrow, are you stretching yourselves? Do you have any loans/HP/Credit cards?

opinions4u · 3 April 2012 at 8:53PM

but I don't really see how a couple with our income can be seen as a real risk

No. But you're not a lender. I assume you want to borrow around £145k.

Some people don't pay their mortgage.

Some properties fall in value.

That combination means some lenders lose money when the give mortgages.

acl2009 · 3 April 2012 at 8:59PM

My husband and mine joint income is around 5k per month after tax and despite great credit reports we required a 15% minimum deposit on our house. It's nothing to do with your credit rating, very few lenders are keen to give a 90 ltv. We were fortunate to be able to actually put down 60k on a 250k property and the deposit size opened up far more options then if we'd kept some cash back.

Thrugelmir · 3 April 2012 at 9:01PM

lilygirl85 wrote: »

Having to save another 5% (i.e. in excess of £8,000) is going to take us an age because we are getting married in 12 months and wanted to be in our home before hand...

12 months @ £4,200 = £50k of income.

Are you really going to struggle to save £8k?

Or are their other factors?

lilygirl85 · 3 April 2012 at 9:01PM

We earn about £70,000 gross between us. We have a £16,000 deposit and are hoping to borrow £140,000.

I have a professional studies loan of £9,000 which was taken out with NatWest to pay my law school fees in 2008 (I am now a solicitor) and has low monthly repayments of £170. I have never missed a payment. We have no credit cards and no HP. I have one store card but it has a £50 limit on it and any balance is always paid off in full every month.

Obviously we will be able to save a further 5% but it will just take longer than we were hoping for and we will probably lose out on the house we love.

Dave_Ham · 3 April 2012 at 9:06PM

Honestly, find yourself a local broker and they will sort this for you...!

£4,200 net income per month and can't get a mortgage!

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