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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:
AWaspOnAWindowInAHeatwave · 19/01/2018 22:16

@PasstheStarmix - NatWest may allow disability benefits as additional income but this is subject to underwriter discretion. Also their affordability model limits the loan to 4x annual income at 90% or above.

justtryingtogeton · 19/01/2018 23:26

I am a broker, speak to the Halifax.

They accept dla, will be happy with 5% deposit, and go to 4.75 x income.

Broker will have a cheaper deal, but direct you get cash back, so may not be too different overall.

7k savings would just be enough at £80k.

Buying a flat instead of a house affects affordability.

Original poster
TroubledTribble28 · 20/01/2018 01:13

Tbh our low income means we would never be able to add to our deposit, my dad left me the £7000. Now we have two extra dogs to feed, insure and care for any excess money goes on them. We have an almost 5 year old son and there are no loans, credit cards, debts, nothing like that in our history. I just have to hope we can rent with three dogs allowed somewhere and try not to touch the £7000 :/ I'm wondering if I could lower my expectations to a fifty grand mortgage as there are houses here in that bracket, even if they are completely fucked Grin there's some excellent advise here and I'm going to take each post on board with the husband. Thanks everyone!

OP posts:
Allaboutthatcake · 20/01/2018 01:16

Move to Glasgow, you’ll get a sub 80k property no bother.

antimatter · 20/01/2018 01:25

Go directly to your bank for mortgage advice. They will be able to advise you on their offer. You may get better offer elsewhere but use your bank as a starting point.

buckyou · 20/01/2018 01:38

It could be a number of things, was your broker not more specific on what the problem was?

  • low income, I'm not sure benefits count? Is there any way you can increase your income?
  • low deposit, needs to be at least 10% LTV
  • affordability, lenders are quite hot on this now. What are your other outgoing? Can you realistically afford a mortgage if you can't potentially save anymore money at all?
  • credit, doesn't sound like your credit is bad but have you borrowed any money at all recently? Lenders want to see some record of borrowing to make sure you can pay back responsibly.
Jon66 · 20/01/2018 01:53

You need to improve your credit rating. Fair is not good enough. The easiest way is to get a credit card, use it a couple of times a month but ensure you clear the balance every month. Obtain a copy of your credit report if you haven't already. Google how to improve my credit rating and work at it for a few months.

smeerf · 20/01/2018 02:56

Improving your credit score is not something you can do quickly - you need to apply for credit in the form of credit cards and overdrafts. The initial applications will negatively affect your scores initially, but then the increased amount of credit you have been extended will improve your score in the long run.

Shared ownership flats will usually not allow animals (in my experience), so that's no good.

Inheriting £7k does not equal £7k to spend on a deposit - you need to budget for solicitors fees, survey etc.

All in all, because of the tight timescale you're working with, you need to focus to finding a new rental property right now that will accept dogs, rather than thinking about buying somewhere. Often if you pay a larger security deposit, landlords can be persuaded to allow animals, you just probably won't get it back when you move.

If you're still interested in buying somewhere in the future, sort out your living situation now and then spend the next year or two working on improving your credit score and looking for a better paid job.

Good luck, and I'm sorry for your loss.

Sleephead1 · 20/01/2018 06:56

Good luck op we have just got a mortgage for 117k from nationwide they take child benefits and overtime into account. We probably have total income of 25k all in with a 10% deposit but op we have played 500 in searches/ surveys and solicitors feed are 1k so you would need money for this also when you get it surveyed if it shows anything you need to get it looked at ours has shown the damp proofing may have failed so I've just played 150 to a damp proofing company to look at it. So I would say you would need to save for the money for fees if you don't have it.

Reallylongstory · 20/01/2018 07:08

Good luck sorting this out. Could one of the reason be that the 20k is a combined amount. Don’t know if it’s still true now but you used to get a lower multiple borrowing on a combined salary than a single one eg 3 times single salary vs 2.5 times combined? Hope you manage to get out of rental soon especially if you’re looking after dc and dogs.

Fintress · 20/01/2018 07:13

Improving your credit score is not something you can do quickly - you need to apply for credit in the form of credit cards and overdrafts.

My daughter had never had any credit when she applied for her mortgage and was advised to do this by her broker. She got her mortgage quite quickly after getting a credit card.

Kissmycousinkate · 20/01/2018 07:16

Deposit and salary are both okay, check out Halifax. Go into several banks and arrange an AIP, only a "soft" search on your credit file so doesn't affect that but will give you an idea of what you can borrow and what deposit you need. I think you would be able to do this online....good luck

PasstheStarmix · 20/01/2018 08:12

I’m not sure you’re incomings are enough for your outgoings, I know somebody who earned about 2 grand less than you do with no dogs and no dc and borrowed £60 odd grand on a 95% mortgage and laid down a 5% deposit. She had no credit, they’re really strict.

PasstheStarmix · 20/01/2018 08:12

your

PasstheStarmix · 20/01/2018 08:14

Find out what your credit rating is by going on noddle online (it’s free) as with no cards or anything it sounds like you may not have loaned credit before and may not have built up a rating?

19lottie82 · 20/01/2018 08:44

pass what do you mean by a rating? If you mean what Noddle decides you are as in poor/Fair/good, then that’s really nonsense, as is the scores given out by other agencies. Lenders don’t see that / them.

The credit history is what is important.

Lenders don’t want to see any late or missed payments in the last six years, but they do want to see expamplea of using credit responsibly. People think never having debt is a good thing, but it isn’t. Much better to have a credit card which is used but paid off in full every month.

PasstheStarmix · 20/01/2018 09:53

Yes Lottie I agree that’s correct but the rating gives you an indication as to how your credit history would be viewed by a lender.

Allaboutthatcake · 20/01/2018 11:43

Sorry to actually try to be helpful, you do not need 10% - there are still 95% mortgages out there. There are also 100% mortgages creeping back in.

However, I do think your income is too low, when I bought I could get up to 60k and was on a similar income. I thought that the amount you could borrow was slightly less for a couple?

There are lots of calculators online, use them and figure it out. I second going direct to the bank.

TroubledTribble · 20/01/2018 11:54

Jobs here are few and far between, my husband is stuck in his current job because they are very good about days off if I'm very ill. A better paid job would definitely mean retraining/further education but between caring for me and our son plus all the extra work with the dogs :/ we can afford to pay back upto 450 a month and the mortgage broker went from 'Yay excellent, go choose a house' to 'fuck off, I'm busy' argh.

Allaboutthatcake · 20/01/2018 12:15

Seriously just find a new broker or do some research yourself.

19lottie82 · 20/01/2018 13:15

you need to apply for credit in the form
of credit cards and overdrafts.

God no! Do NOT get an overdraft to try and boost your credit worthiness. Lenders do not approve of them, they are “bad” credit and show you cannot manage your finances.

A credit card yes, an overdraft? Never.

Bossbaby12 · 20/01/2018 16:16

Which lenders are offering 100% mortgages cake?

Allaboutthatcake · 20/01/2018 17:29

Barclays, Scottish widows from a quick google. I became aware of it because a Scottish building society have started offereing them again - I assume it’s not just up here they’re available.

Sl33pDay · 20/01/2018 18:17

I would suggest that you research the other fees needed to purchase a property

Mortgage arrangement fee
Survey
Solicitor fee
Land registery
Stamp duty (check if you need to pay)
Other odd fees that appear
House and contents insurance
Moving costs
Emergency money if something goes wrong at the time of moving
House deposit

So you will need more than the house deposit to buy a property

PasstheStarmix · 20/01/2018 20:32

I agree with Sl33pDay, it all certainly adds up. We paid for a valuation which cost us in excess £500 and then the vendor dropped out and we lost it (a lot of money to us as were first time buyers and had to save it again.) We only wished they had the same rules as Scotland where if you drop out you’re responsible but I guess that’s a whole new thread!