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First mortgage application - reassurance/advice needed!!

(73 Posts)
PartyRat Thu 03-Mar-16 20:12:14

Hi all! Long time lurker, first time poster. About to submit our first mortgage application and need some wisdom! smile

Boyfriend and I rent a lovely flat that's perfect for us. Our landlord knew we were looking to buy (eventually) so offered us the flat and accepted a bargain price. So off we went to the mortgage broker, and here's where my AIBU starts.

Because this happened a lot sooner than we expected, my finances aren't particularly great - leftover student overdraft of £2.5k which I'm always in, monthly wage isn't enough to bring me out of it. Credit card with about £450 outstanding, but the broker said that shouldn't pose too much of a problem. Sent the broker my 3 months bank statements and was told 'there could be a problem' as I was constantly in my overdraft and there was one charge for unarranged overdraft use (annoying as I had money in another account which could have covered it blush )

I am hugely worried about our application in light of this. It's a joint mortgage application, and I'm really worried that we will be declined because of me blush Boyfriends accounts are good, no overdraft, no credit card, no student loan etc. The affordability calculator said we could get around £209k but we're only asking for £166k which I hope helps it?

AIBU in being so worried, or is it likely to be declined? It feels like we have even more pressure than a normal mortgage application as if it's declined our landlord will need to sell to someone else leaving us without a flat!! Please let me know what you think, might calm me down a wee bit....or maybe not!

Orda1 Thu 03-Mar-16 20:14:02

What % deposit do you have?

Queenbean Thu 03-Mar-16 20:16:12

What deposit do you have?

Gracey79 Thu 03-Mar-16 20:16:34

Do you know which lender you've applied to? I don't broker anymore but used to and I'm almost certain there are lenders that would do this mortgage provided it's affordable, where I work now would be v fussy on an exceeded overdraft but they are perhaps the most difficult lender on the market. The credit card won't really make any difference the question the lender will ask is, if the overdraft is exceeded now, how will they manage the mortgage payment?

Bearbehind Thu 03-Mar-16 20:17:47

If your broker is half decent then they'll only attempt an application with a lender who doesn't automatically decline based on overdraft use- some do.

No one on here can say whether your application will be successful or not- only someone with your full credit history/ finances can comment.

Is your broker independant and whole of market? Have they asked for your credit reports - from all 3 agencies?

PartyRat Thu 03-Mar-16 20:35:15

We have a 5% deposit, but the application will be with natwest who accept them, I believe as part of the help to buy scheme.

It's an independent broker, I work for the NHS who provide mortgage advisors for staff so that's who we're going through

He didn't ask for credit reports, but did ask for 3 months bank statements and pay slips, and also evidence of any commitments.

Really worried it's going to be declined sad

Queenbean Thu 03-Mar-16 20:38:09

Op the others can give more details but the above would ring alarm bells slightly - the landlord is desperate for you to buy it so is giving you a really good price, plus he has registered for the help to buy scheme too? How old is the flat? Have you had a survey done yet?

Bearbehind Thu 03-Mar-16 20:42:02

I'm not an expert but, having lurked around the MSE forum, I was under the impression that Nat West was one of the least likely to approve a mortgage with repeated overdraft use.

For the life of me I don't understand any broker who doesn't request your credit reports before making an application- they are virtually shooting in the dark without that data and relying on lenders credit checks to find any hidden issues, which in itself causes problems as you have extra credit checks your file.

Orda1 Thu 03-Mar-16 20:43:04

Oh dear, a small deposit and poor credit history is hardly going to make them jump at the chance is it.

Gracey79 Thu 03-Mar-16 20:44:47

It's normal to just ask for bank statements and wageslips, do you have the money to clear the overdraft if they asked you to? I've not dealt with natwest much but i have had much 'worse' cases go through in the past, your situation really isn't that dire, the broker should be able to put an explanation as to why it was exceeded forward for the lender to consider. Good luck I hope you hear soon

PartyRat Thu 03-Mar-16 20:45:58

We have the home report from when it was previously on the market. It was valued at £180k but he accepted our offer of £175k. It's an old tenement flat (we're in Scotland) so probably built turn of the century? It's not the new build flat help to buy scheme we would be using, it's one where the govt can contribute to the deposit cost...again I'm in Scotland so not sure if that's available in England or not?

I think the landlord was happy to accept a lower offer from us as it would mean he could avoid estate agent fees as it would be a private sale. Although that's another thing I'm worrying about now haha!!

Bearbehind Thu 03-Mar-16 20:46:22

orda is right, you have to be pretty squeaky clean for 95% mortgages.

I'd look for a broker who actually analyses your case before making applications.

TapDancingPimp Thu 03-Mar-16 20:49:05

Hi OP,

I work for a broker at the min.

As PP said your advisor will hopefully know the market well enough to apply to a lender who maybe doesn't ask for too much in the way of supporting documentation - in my recent experience this is usually Halifax and Woolwich/Barclays. As long as she's assessed your affordability and credit scoring she's doing her job well.

On the other hand some lenders are ridiculously picky and go through statements under a magnifying glass.

Good luck to you.

TapDancingPimp Thu 03-Mar-16 20:51:28

And yes, unfortunately for people with a smaller deposit, they usually ask for more documents.

PartyRat Thu 03-Mar-16 20:51:42

It's going to be a joint application with my boyfriend, I don't know if that makes a difference overall? As I said his finances are in much better shape - no overdraft, no credit card, paid off student loan etc. He's listed as the first applicant because his salary is higher - don't think this makes a difference though?

Bearbehind Thu 03-Mar-16 20:51:47

tap you do realise that if you are a broker you are breaching the industry regulations by recommending lenders without assessing the facts?

As for using the phrase 'credit score' - I despair.

PartyRat Thu 03-Mar-16 20:54:10

TapDancingPimp, he did check Halifax to see their rates too, but it was going to be over £100 more per month.

I'm unsure what the best route is because I know repeated requests for credit make your records look even worse!

Gracey79 Thu 03-Mar-16 20:55:20

What's wrong with credit score? confused
All the mortgage applications I've ever made have been credit scored applications.

Bearbehind Thu 03-Mar-16 20:56:21

Op, you're not really in a position to be fighting for the best rates. I'd be more focused on getting the best lender for your circumstances.

I know it's ridiculous that paying more might be the only option but it's the way it is.

Gracey79 Thu 03-Mar-16 20:56:41

Op I would just leave it for now and see what the broker/natwest come back with, I didn't want to say the lenders name but I did immediately think hfx would do this blush

Orda1 Thu 03-Mar-16 20:57:28

If it helps OP we bought our house on just wage slips, obviously they did the checks but no bank account looking. In all serious though I'd build up a bigger deposit, 20%.

Bearbehind Thu 03-Mar-16 20:59:00

A 'credit score' is a completely meaningless number generated by the credit reference agencies.

Each lender will have its own scoring mechanism but they all vary.

What matters is a persons credit history and how that fits with a lenders criteria ie how they view previous behaviour/ issues.

TapDancingPimp Thu 03-Mar-16 20:59:37

I'm not a broker hmm - try skimming slower next time.

Nor did I 'recommend' a lender, I was simply stating that it was an option for OP's financial advisor to assess and select a lender who doesn't go bat shit on an overdraft.

And can you clarify further on the use of 'credit score'? As someone who's in contact with lenders and BDMs several hours of the day, I'm fairly certain this is a perfectly acceptable and highly used phrase in the industry!!

PartyRat Thu 03-Mar-16 21:00:59

Gracey, I think that's what we're going to do. The brokers going to process it tomorrow (if we give him the go ahead) so we'll see what happens sad

The frustrating thing is, and I know this doesn't count/there's more to it before anyone says, I've never missed a single rent payment in my life, always paid in full and on time. Wish they could just take that into account!!

Bearbehind Thu 03-Mar-16 21:01:09

You said you work for a broker- therefore you are governed by the same rules tap

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