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Original poster

Mortgages: Got a deposit, still can't get approved?!?

56 replies

TroubledTribble28 · 19/01/2018 20:04

Hello! I'm looking for advice on my current situation as the mortgage advisor (with awards and all sorts, he came highly recommended) told us in December that we were certain to be approved for a mortgage has now told us to come back in a few months when he has more time Hmm We earn 20,000 combined, some of this is disability benefits but majority is husbands wage, we both have 'fair' credit scores and 7 grand in cash for deposit. We're looking at borrowing 80k maximum but mortgage bloke says not a chance in hell? No debts, nothing owed, no ccjs, we were told we would certainly get a mortgage but now the advisor is saying don't even bother going to banks directly as we'd be wasting our time. Can anyone shed some light? :/

OP posts:
Lalalaleah · 19/01/2018 20:05

This reply has been deleted

Message withdrawn at poster's request.

Original poster
TroubledTribble28 · 19/01/2018 20:08

Thank you LalaLeah! Do we just focus on trying to improve our credit scores for now? We have to get out of our current rental before the landlords find out we have my dead dads dogs here, nightmare situation and time isn't on our side.

OP posts:
Sleephead1 · 19/01/2018 20:13

I think it may be because of the deposit but you can get some 5% mortgages I believe. Has your broker done anything for you ? I would see another broker to be honest as they should be able to advice you

KizzyKat91 · 19/01/2018 20:17

I'm afraid you're earning too little and don't have a big enough deposit. I earn £23000 salary, have a £20000 deposit and have excellent credit rating, but am struggling to get a mortgage. I've been told I can borrow a maximum of 70k which just isn't enough.

19lottie82 · 19/01/2018 20:18

Ignore your score..... it doesn’t mean anything. It’s the HISTORY that’s important.

Do you have any late or missed payments? Have you had any credit recently? It’s good to have some to show you can handle it responsibly.

And I agree that you really need a minimum of 10% deposit. And you’ll need legal fees on top.

Get saving again and if you don’t have any current credit, get a credit card and pay it off in full every month.

19lottie82 · 19/01/2018 20:19

PS surely your mortgage advisor should be able to shed some light on how you can improve your chances?

19lottie82 · 19/01/2018 20:21

PS KK91 you’re only being offered just over x3 your annual salary. That’s very low! Never heard of anyone being offered less than 4 for a single person application!

I was offered £140k on a 30k salary just last year by Halifax.

Might be worth checking out some other lenders.

Greatestshowgirl · 19/01/2018 20:22

The disability benefits can not be relied upon and that is making up part of your income.

RippleEffects · 19/01/2018 20:23

If you're under 40 you could put your 7k into two LISA and it'd grow by 25% after a year. It'd mean a bit of a delay on buying though but would boost your mortgage options and give you a chance to make that fair credit score good.

money saving expert LISA

C0untDucku1a · 19/01/2018 20:24

You need about £8k in fees for buying too surely? Do you have that separately? Of it the £7k total?

StylishMummy · 19/01/2018 20:27

Not every lender will accept disability benefit as a source of income. Do you have any debts/dependant children?

ProseccoPoppy · 19/01/2018 20:28

Some banks/building societies may not take the disability benefit/other “state” payments into account (a friend had that issue with widowed parent’s allowance). She was able to get a mortgage direct with (iirc) either Halifax or Nationwide - maybe try their website calculators to get a rough idea?

ProseccoPoppy · 19/01/2018 20:30

And awards or not, if you want a broker (we did better without) then definitely try a different one - yours doesn’t sound at all helpful!

eurochick · 19/01/2018 20:31

That's a pretty punchy application : less than 10% deposit, 4 times income, income includes benefits.

southboundagain · 19/01/2018 20:31

I agree, I think it's the benefits. Have a look at this page as there might be things you can do about that though:

www.moneyadviceservice.org.uk/en/articles/getting-a-mortgage-if-youre-ill-or-disabled#getting-a-mortgage-if-youre-on-sickness-or-disability-benefits

hazeydays14 · 19/01/2018 20:32

Try some mortgage calculators directly with the bank but it’s likely you’ll need a 10% mortgage. Barclays do a ‘family spring board’ which allows someone to put the ‘10% deposit’ in a savings account, you get 100% mortgage and they get their money plus interest back after 3yrs, obviously this won’t suit everyone.
You’ll need some to cover fees but I doubt it will be anything near £8000 for a house in your budget! Ours were around £1,500. Don’t forget first time buyers no longer pay stamp duty.
There are some schemes which allow a 5% deposit on new builds, the government effectively loan you 25% which they get back out of the equity when you sell.

southboundagain · 19/01/2018 20:33

Oh, and please be aware that you'll need money for solicitors (plus any moving costs etc), so if £7k is all your savings you will need to keep some of that by and can't spend it all.

Whymustyoubringinthebirds · 19/01/2018 20:36

With most lenders affordability stress rates increase with LTV so if you are looking at over 90% and with benefits some lenders will not look at it others might only take 50% some maybe take 100% of the income

I would try a different broker first off but it could be that your income is just too low and you might need to try focus on saving some more deposit

Etymology23 · 19/01/2018 20:37

Fees on my house totalled about a grand.

Got offered 4.5x salary mortgage with a 10% deposit. Salary about £24k at the time.

Key here will be assume that they can’t rely on disability benefits. So say you have £15k salary you’re then really looking at 67k max. £16k and you’re up to 72k which combined with using a LISA should give just about enough for a deposit but I think you’d have to wait a year with a LISA before you can withdraw.

If you’re on >4.5x salary,

LonelyGir1 · 19/01/2018 20:41

Your combined salary/ benefits, and deposit, are far too low which means that you're too high risk for most high street banks. You may be able to get something with a subprime lender although the interest rate will be high...but financially it would be better if you waited until you can save some more. Good luck, I know it's hard.

AWaspOnAWindowInAHeatwave · 19/01/2018 21:26

@LonelyGirl - I can't think of a single
subprime lender who will offer a 95% Ltv mortgage at present?

The key here OP is your recent credit history (not your credit score, which isn't worth the paper it's written on as each lender uses their own individual method of scoring) and whether you have any debts outstanding (loans, credit cards, car finance, catalogues etc). Are you able to provide any more details?

Bossbaby12 · 19/01/2018 21:30

Some lenders won't take disability benefit as useable income unfortunately.

PasstheStarmix · 19/01/2018 21:33

You need a 95% mortgage. Try NatWest.

PasstheStarmix · 19/01/2018 21:34

Are they even still doing 95% mortgages I don’t know

Weimaragi · 19/01/2018 21:34

We were in a similar situation so went for a shared ownership property and don't owe anyone anything :)