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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To ask why we were declined a mortgage agreement in principle

200 replies

ChickenChickenHen · 19/05/2023 16:27

Slightly perplexed. We just applied for a mortgage agreement in principle with our bank. We need a loan of just under 3.5 times my partner's salary (I'm a SAHM). We thought this was fairly conservative. Just discovered that the most they can offer is only 2.25 times his salary! We checked with another bank and they offered slightly more but still only 3 times salary, so not enough.

We have a huge deposit (63% of property price), no debts, excellent credit scores (just soft checked), very secure income. We do have two kids but outgoings fairly low.

Now obviously I know about the disaster budget and the cost of living etc, but my understanding was that 4-4.5 times salary was still typical. Is that wrong? Is it just for people without dependents?

We asked the bank for an explanation but they just gave us a rote statement about affordability that didn't explain anything. Maybe this is normal and we will just have to wait for prices to fall, but any insights would be gratefully received

OP posts:
Prettylittleroses · 19/05/2023 16:29

It’s because four of uou are living on his one salary, so affordability checks bring what you can have down.

titchy · 19/05/2023 16:29

Not an expert but I think the multiplier is lower where there is only one salary as more of a risk.

JediIsMyMaster · 19/05/2023 16:29

I would use a broker rather than approach the banks directly.

Some banks are more cautious than others.

Leftphalange100 · 19/05/2023 16:30

We've had a similiar problem recently. Apparently it wasn't the amount that was the issue, but the amount of years I wanted to pay it over and the monthly payments. They said it was too high and I apparently can't afford those monthly payments when they did the affordability check. I got more money but had to stretch the mortgage out, change years etc. It was halifax and they were helpful at explaining what we could do. Have they just given you a definite no? If it was online try to speak to someone on the phone and do it that way.

Vegasdreaming27 · 19/05/2023 16:30

Things that can reduce income multiples are existing credit commitments, childcare costs and dependents. You and both your children will count as dependents, do you have either of the other 2?

Rowthe · 19/05/2023 16:34

How old is the person applying for the mortgage?

How old are the kids- any nursery fees? Or private school fees.

Student loans comin out? Car on finance, any other regular outgoing that may reduce your affordability.

And also the fact that one person is financially supporting 4 people.

Rowthe · 19/05/2023 16:35

Speak to a mortgage broker they might be able to help.

Original poster
ChickenChickenHen · 19/05/2023 16:36

Thanks everyone this is really helpful. Looks like it is the income to dependents ratio that's the issue. It's extremely conservative though - the amount we're being offered would mean our mortgage was literally half of our current rent!

OP posts:
NowYouSee · 19/05/2023 16:36

I would definitely go through a broker here. Make sure whoever you speak to is “whole of market” so can go to anyone.

Eudaimonia5 · 19/05/2023 16:38

It's pretty risky having one person financially supporting 4 people. What if he's ill or comes out of work? You're classed as a dependent like the kids. Can you get a part time job? Even if it was like 12 hours per week or something. At least it shows you're able to make a financial contribution.

Original poster
ChickenChickenHen · 19/05/2023 16:40

Vegasdreaming27 · 19/05/2023 16:30

Things that can reduce income multiples are existing credit commitments, childcare costs and dependents. You and both your children will count as dependents, do you have either of the other 2?

No credit commitments, no loans, no school fees. Youngest is 2 oldest is in school. We currently spend some money on childcare but it's not much and not obligate as I'm SAHM.

OP posts:
FriedEggChocolate · 19/05/2023 16:41

If you're renting now, can you approach the Skipton, who have a renters mortgage offer, so technically no deopsit required.

Original poster
ChickenChickenHen · 19/05/2023 16:41

Thanks to everyone suggesting a broker. I'll definitely pursue this

OP posts:
frankgu · 19/05/2023 16:41

How many yrs was the term?

Original poster
ChickenChickenHen · 19/05/2023 16:43

frankgu · 19/05/2023 16:41

How many yrs was the term?

  1. They did say though that the amount we asked for (3.5 times salary) would be unaffordable over any term
OP posts:
Original poster
ChickenChickenHen · 19/05/2023 16:45

Eudaimonia5 · 19/05/2023 16:38

It's pretty risky having one person financially supporting 4 people. What if he's ill or comes out of work? You're classed as a dependent like the kids. Can you get a part time job? Even if it was like 12 hours per week or something. At least it shows you're able to make a financial contribution.

His job is very secure but we were also planning to get insurance for these eventualities.

OP posts:
Original poster
ChickenChickenHen · 19/05/2023 16:47

FriedEggChocolate · 19/05/2023 16:41

If you're renting now, can you approach the Skipton, who have a renters mortgage offer, so technically no deopsit required.

Deposit is no problem. We have a big deposit that's why we're a bit surprised!

OP posts:
QuintanaRoo · 19/05/2023 16:47

ChickenChickenHen · 19/05/2023 16:41

Thanks to everyone suggesting a broker. I'll definitely pursue this

London and country are very good.

DollyTots · 19/05/2023 16:48

I’d shop around a bit. We managed to get 3.5 x my DH’s salary whilst I was a SAHM and had one DD. Most lenders were only prepared to lend if I wasn’t on the mortgage, as I was also classed as a dependent. However, we ended up going with NatWest, who at that time specifically would rather have had me on the mortgage.

Original poster
ChickenChickenHen · 19/05/2023 16:51

DollyTots · 19/05/2023 16:48

I’d shop around a bit. We managed to get 3.5 x my DH’s salary whilst I was a SAHM and had one DD. Most lenders were only prepared to lend if I wasn’t on the mortgage, as I was also classed as a dependent. However, we ended up going with NatWest, who at that time specifically would rather have had me on the mortgage.

This is really interesting. Thanks, I'll look into the options here

OP posts:
Threeboysadogandacat · 19/05/2023 16:55

Ds2 was offered 4.5 x his salary about a year ago. He might not be offered that now due to rising cost of living. He is single, no dependents and no debt. He still feels he will be best waiting to see what’s happening with the price of houses and the interest rate. However he’s living at home and saving, not having to waste money on rent.

Original poster
ChickenChickenHen · 19/05/2023 16:56

I guess one thing I have to consider is...maybe they're right? Maybe we can't afford this. I think of myself as extremely cautious and had done some budgeting spreadsheets, but maybe the banks have a better grasp of what's coming. Maybe we should at least wait for a bit and see if prices go down to a point where we would be borrowing less? I just don't know 😕

OP posts:
caringcarer · 19/05/2023 17:00

A good broker Will find you a number of mortgage offers to pick from. You might get higher rates though.

Wolfinthehouse · 19/05/2023 17:07

Your best bet is actually to get a job, wait 3 months then reapply. Even if its just a 8-12 hour job. It will make a difference to your mortgage application. They want to see that one wage isn't supporting so many dependants.
I have 2 friends that both needed to get a PT job in tesco just to make the bank happy. Once the sale had gone through both quit!

Champagnecharleyismyname · 19/05/2023 17:08

A broker has access to software that gives mortgages not available on the high st. They should also do an affordability check before applying for an AIP.

Providers set their own affordability so some will be stricter on dependents then others.

Make sure there are no late payments of loans or credit cards as that is often an auto decline.

Good luck

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