Mortgage Declined - Broker

axel132132 · 7 January 2018 at 2:43PM

So, i have been looking at a home a new build from harron homes. They have told us we have to use there broker to start with to get a decision in principle but can use our own bank etc if needs be.

So the broker rang and told us that our mortgage has been declined and Halifax have said they wouldn't even lend us 10k.

Our broker has said that he used Halifax and Skipton, and that he is going to try an 85% mortgage now not 90%ltv. We sent him our noddle credit score and this is the information he said was bad about them.

David’s report –
You are over 75% of your credit card limit.
Over your credit card limit in the last 12 months
Undisclosed credit commitment with Secure Trust Bank for £27 per month.
Undisclosed credit commitment with Rate Setter for £24 per month.
In your over draft for the last 3 months.
Default with O2 for £6 is July’12 and Satisfied in August’14.

Since this on Friday, i have totally paid and closed Secure Trust Bank and totally paid and closed Rate Setter. Nothing i can do about over draft. I also on Monday will be lowering my credit card to below 50%. The default to 02 is an error and i have emailed noddle saying this is a error and will be rining o2 to get this removed.

Ashleigh’s report -
Still has everything registered at previous address. Various other linked address not disclosed.
Undisclosed credit card with Capital one. Over the limit on credit card in August.
Default with Vanquis issued in Sept satisfied this month for £474.
Default with Lowell for Telecomms for £692. Issued December’15 satisfied in July 2017
Default with Lowell for Mail order for £139. Issued April’13 satisfied in Jan 2017
4 payday loans

Since this we have set everything of ashleighs into current address
Nothing we can do about over limit on credit
Default was her mum taking loan out in her name - nothing we can do unless we want her mum to goto prison
Lowell - Apparently Ashleigh says vodaphone made an error but she paid it anyway
Lowell - Avon... This is legit, some reason she didn't pay them and has paid them recently
payday loans - no idea why she got these but she never mentioned to me otherwise i would have told her to stop being so stupid paying 1000000000000000000% APR but anyway whats done is done.

He has said its not the affordability that's the issue he said we can easily afford, its the credit files.

Anyway since then (Friday) i have heard nothing as he obviously not at work on the weekend so I've been doing a lot of research online. Most of which is from this website and this forum.. Infact all of which is from here.

So i see some credit companies banks etc use certain credit references only.

Mine and My partners score are as followed on each:

CallCredit (Noddle) - 1/5 and 1/5 (around 550 score both in red)

Experian (Experian) - 964/999 (excellent) for me and 555/999 (Very poor (Borderline poor) for my partner.

Equifax (Clearscore) - 459/700 for me and 402/700 for partner

I read on here a few things 1) if you get a no STOP!! shouldn't my broker know this he said he is doing DIP and only doing soft searches so wont affect me.

My other things i have read is that some lenders only use certain credit agencies to view your score. Now as he said Halifax said no they use Experian. Also my GF banks with Halifax and that may be the reason they said no.

Would you suggest i try look at a lender who uses only Equifax as we are both bang average with Equifax OR should we try one with Experian being I'm Excellent and she is Very Poor or will the Very Poor put lenders of us even tho i am excellent.

Or is it worth seeing if i can get the mortgage soley in my name and use an Experian lender as i am Excellent with them.

The loan we are looking for is 295995, the deposit will be 35000. so roughly a 12% deposit so 88% LTV.

I earn 32k standard with around 30k overtime and 2k bonus
she earns 20k standard with around 8k overtime no bonus

Outgoings I'm looking at 399 a month for my car and 40 a month for my phone

she is looking at 210 for her car and 13 for phone

Thanks for your help and support and time reading this post :-)

CommitedToChange · 7 January 2018 at 2:49PM

Ignore your credit numbers - they mean nothing.

This issue I see is with the defaults and payday loans and use of overdraft on your files.

Is your broker used to dealing with adverse credit as that is what you need.

CommitedToChange · 7 January 2018 at 2:51PM

Are the defaults/overdrafts/payday loans on all your credit reports?

You need to get the full report from equifax and expedian to see what they say and ignore the numbers

amnblog · 7 January 2018 at 3:47PM

Two issues jump out here David.

1. Your Broker does not know what he/she is doing with a case such as yours. An experienced Broker will check all 3 credit files before taking any action. Using Halifax to see what happens is a hit and hope approach.

2. Your deposit is likely to be too modest given your credit history.

An alternative, a suitably experienced broker is in order.

kingstreet · 7 January 2018 at 4:08PM

As many lenders won't exceed 85% on a newbuild house, or 75% on a newbuild flat, for them, your deposit is too small. That's why Halifax and Skipton have been selected so far.

You have limited lender options for this reason. When they are added to the reported credit issues, your options are going to be severely restricted.

You will need the help of an experienced broker here.

axel132132 · 7 January 2018 at 4:20PM

Ahh i see, He mentioned that harron may be able to give an additional 5% deposit contribution making it a 85% LTV,

He said he will check a lender called Precise at a 85% LTV.

The slight issue i am having is, harron homes are doing a part exchange for my old home. They are saying they cant book a part exchange in without a DIP. I cant then guarantee they will give a 5% deposit contribution in order to get me into the home. But without the DIP I'm at a standstill as they wont do anything.

Ive just looked at HSBC online, they can do a DIP and use Experian. Experian is the file i have the 964/999 on - Is it worth me downloading my file from Experian. I did a check on HSBC and they say i can get the mortgage on my own. Well they did some chart thing i didn't understand but as below it it said apply for DIP, I'm assuming that meant i can afford it. I didn't want to do a DIP without first asking as i don't want to ruin my chances by applying or searching for too much credit.

So basically i might be able to get 85% LTV. If harron were to gift 5% which they must be able to do if he is suggesting this method as Evolve work directly with harron homes. Then it would be 295995 with a 44399 deposit to make it 85% LTV (If my maths is correct) I have 35k deposit and therefore harron only need to give 10K which is about a 3.5% deposit contribution and i think worst case i may be able to borrow some of my mum as a GIFTED deposit.

So is it worth just trying a HSBC DIP using a 85% LTV (I read aswell that martin says if 85% deposit is 15k put down 15100 to increase chances)

Atm I'm living with my mum, in reality i can save with my GF about £1500 a month. So if i get a DIP for 85% the home has only just had the footings put down and therefore i recon at least 3-6 months wait for the home to be built that's 4500-9000 extra i could have for the deposit myself without borrowing / gifted deposit so i think it could be a reality. I could also make some extreme changes in my spending and do some mega saving and save more.

Sorry for all the essays I'm desperate! :-D

axel132132 · 7 January 2018 at 4:43PM

Just did a calculator online HSBC website, says i can get £299000 on my own. Maybe this is the route, get the mortgage DIP from HSBC on my own as i can afford clearly, my mrs would be happy either way. Put a 85% LTV. I could fix this for 5 years. Then work hard to sort out our credit scores and apply in both our names in 5 years time.

getmore4less · 7 January 2018 at 4:56PM

£296k
Base £52k 5.7x
Max £92k 3.2x

before you take off the commitments..

You are over 75% of your credit card limit.

How much is the 50% you can get to and the OD.

How will a 85% application be any use if you don't have the deposit?

Thrugelmir · 7 January 2018 at 5:32PM

axel132132 wrote: »

So is it worth just trying a HSBC DIP using a 85% LTV (I read aswell that martin says if 85% deposit is 15k put down 15100 to increase chances)

HSBC are amongst some of the most consersative risk adverse lenders in the market.

He has said its not the affordability that's the issue he said we can easily afford, its the credit files.

Your credit history is extremely important. As enables lenders to profile you as a potential borrower. Mortgages are a long term borrowing commitment. A history of overlimit credit limit usage, payday loans, overdraft usage and unsettled defaults doesn't paint a good picture. Despite a joint household income of circa £84k a year. Concern for an underwriter is that you now wish to borrow an extremely large amount of money. With no indication that you can manage your personal finances well.

Never forget that time does heal. Onus is on you to address the underlying issues that are causing the problems.

TheBanker · 7 January 2018 at 5:37PM

Have you checked your actual credit files with Experian and Equifax? Not the scores but the details of the accounts being reported. Different lenders do report to different agencies, but given the number of undisclosed accounts, accounts registered at incorrect addresses and defaults I would be surprised if these reports are any better.

I believe HSBC are one of the stricter lenders. Not sure how they will view your credit history.

getmore4less · 7 January 2018 at 6:02PM

harron homes are doing a part exchange for my old home

what the status of that if you are living at home now.

Any missed/late payments on that.

What's your net asset/debt position

Do you have any cash, or it all coming from the existing property

Mortgage Declined - Broker

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