How not to get a mortgage - Please share your tales of woe!

[NotAnotherNewNappy]

DH and I thought we'd done our homework and got three AIPs before we finally made an offer on a property. Now we come to the full application, it turns out the first bank is only prepared to lend us 82k less than originally thought due to our 500pm childcare costs

We have some more interviews next week and I really don't want to screw them up. Please can you tell me other common reasons for being denied a mortgage? We have a 15% - 20% deposit, know we can afford it and really don't want to lose this house. TIA!

You need a broker...try London and Country mortgages. Good luck x

Agree, London and Country are great. They're free and give good advice and sometimes have access to mortgages that you can't get direct.

Try halifax. Hsbc screwed up our application too.

Got refused one as DP had an unpaid DD for £17 (he was changing banks and they cocked it up over a few weeks). So make sure there is nothing outstanding like that. Banks are looking for excuses Not to lend IMHO.

Another vote for London and Country mortgage brokers. They are FREE and amazing. Even rang me at a time that suited me

They even worked out that we were better off staying with the same mortgage lender when our fixed rate ran out, so they did all the leg work and didn't even get paid! Bless them. Lovely, lovely people.

Good luck.

Avoid hsbc- dp applied for a remortgage on an out right owned £230k property of £30k and had 10k in his currant account with them, never over drawn- on a 30k + salary and they refused

I doubt the mortgage broker mentioned is FREE.
Perhaps free at point of sale but you will pay commission on any products you purchase and you will pay an awful lot.

Not free greentown? Mortgage and insurance providers pay nice fat fee?s to brokers, should be enough to keep him/her happy!

Exactly phyllisdiller. Mortgage and insurance providers do pay a big fat fee to brokers - and where do you think the money comes from to pay the big fat fee? Yours truly - you!

..well of course it does. The money comes from 'yours truly' if you go through a broker or if you go direct, so you may as well go through the broker and have less leg work and someone search the whole market for you.

Of course - there's no such thing as a free lunch.
We all know that if you take a mortgage direct from XYZ Bank, you pay XYZ for the pleasure.
But the addition of a broker, an intermediary, means not only do you pay XYZ bank but you also pay ABC brokers.
The money may or may not come directly from you, it may be a commission paid to the broker by the bank - but you will pay extra - double bubble I believe is the tecnical term.
Of course, you may well decide paying the broker to 'do the legwork' is worth every penny. Up to you, but don't imagine it's "free".
The difference in fees over the lifetime of a mortgage can run into many thousands of pounds.
The more people involved in processing your mortgage, your pension, your car insurance, any financial product - they all expect paying and they all will be paid - even if it is sold as "free" at the point of sale - it isn't.
Nobody does anything for nothing in financial services.

avoid HSBC!

your EA may have a broker - it may cost something to use them, but they can help.

also, we used the post office for our mortgage in the end (after HSBC screwed us over monumentally), and they were brilliant, so worth looking at, maybe?

If you PM me your area I can recommend a good IFA if you haven't already sorted through L&C

According to my Dhs application he has no children.... Get a Broker, that is the way ahead. I think it is very important to find a way to phrase the 'truth'

Pinky, just curious - what do you mean by "phrase the truth"?

i mean lie Primafacie - lying is always the way ahead with this sort of thing

(I am slightly dodgy and so is my broker)

If we had told the truth about our children we would not have been able to buy a house big enough to house them

so how is the mortgage I am getting through my broker with Abbey that they are paying him 1000's in commission for going to cost me more that if I had gone to them direct? - same rate, same arrangement fee?

The brokers are skilled at losing childcare costs to make you pass affordability criteria.

Gah, I could never do that!

Certainly brokers are happier to present the 'truth' more favourably on your behalf - for a nice fat fee.
The mortgage provider will recoup the fee/commisssion they pay the broker from the mortgagee over the term of the mortgage.
If a mortgage company pays a fee to a broker for business that they would otherwise have obtained directly - where does the money for the broker's commission come from?
Perhaps they just slash their profit margins for the pleasure of a certain broker's business? Perhaps, ummmm.....

Well it doesn't cost you more befuzzled, thats the thing, if you go to the lender directly they still have to pay call centre staff/branch staff etc. Regulating anyone who sells a mortgage costs money too (regulating, ie making sure that they are competent, giving correct advice etc). All they have to do is pay the broker a fee, I suppose you could argue that they pay out a lot to brokers but then they don't have all the employment/branch/call centre costs.

Massaging/phrasing the truth is a good one, great until you get caught, I do remember a guy having his offer pulled for massaging the truth on his application form (it was quite a porkie but all the same it changed the lending decision to a no). It wouldn't have been too much of a problem if he hadn't already exchanged contracts...fun for all involved (not, obviously).

My broker has cost me about £500 each time - money well spent methinks (he gets the most commission from the bank/building soc)

Lenders make their margin on the difference between what they have to pay to borrow money and what rate they can lend it at. All other expenses, staff, branches and broker commissions come out of that margin.
The reality is that many of the people using brokers are people who may face difficulties getting a mortgage at a standard rate with a high street lender. These borrowers will often be penalised with higher rates, fees, redemption penalties etc.
Many people only go to brokers in the circumstances outlined in this thread - difficulty in securing a competitive mortgage from a high street lender.
A high street lender will always offer better terms than second tier broker sourced mortgages.
People can choose to believe that the broker and mortgage lender are operating free of charge for the benefit of the borrower - but that would be inaccurate.

The broker for our first mortgage had a string of awards on the wall. He lied through his teeth for us - we were both still on probation period for our jobs (though in about the most secure occupation you can imagine), and he marked us both down as permanent. He satisfied himself that we could afford the repayments for the house we wanted, and then made sure we got the cheapest mortgage regardless of the particular pickinesses of the mortgage co.

Obviously the kind of porky that involves telling the bank your salary is 4x higher than it actually is is likely to come back to bite you. But as to the finer details, I don't think there is that much risk - it is the broker's call in the end, they are filling in the form for you. And if it's the difference between getting a mortgage at 0.5% over base rate or 5% over (for eg), well, surely it's a no-brainer, and more than pays for the broker's fee!

though I should say that this was some years ago. In the current market, you need to do your own research very carefully. When we moved at the beginning of this year we didn't use a broker as the one we approached couldn't begin to match the offers we got direct from the mortgage companies. And no, we didn't tell any porkies to anyone:)