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Original poster

Turned down for mortgage- any hope?

17 replies

thinkofthemoney · 29/10/2013 20:18

I know it's not the end of the world but I'm devastated. I have just been turned down for a mortgage due to high levels of credit card debt.
The debt is £29000, accrued paying for a professional degree (now qualified 5 years and paying it off).
I have £80k of equity in my house so will be paying the debt off with the equity.
I want to borrow £149k on a salary of £41k. I will be putting down a deposit of £51k.
I checked my credit report last month and was rated as good. Around that time I transferred one of my credit cards to another provider. Ive just rechecked my credit report and it has dropped by 100 points to fair. It is showing the credit card I moved as being with both the old and new provider, suggesting I have more debt than I do and that my debt has gone up (when it hasn't).
My broker has today submitted a mortgage application to a different lender with whom I had a decision in principle whilst my credit rating was good.
Does anyone have any idea what my chances are or any tips on what I can do?

OP posts:

Ebayaholic · 29/10/2013 21:22

It would probably be better to go to a lender who doesn't credit score, such as a smaller building society. They consider cases individually so would take the reason for the debt into account

HollyBollyBooBoo · 29/10/2013 21:33

Can you wait a month or so? Your credit will go back up when the old credit card is closed, that can take up to 56 days to show up on your credit report.

Don't know of any lender who doesn't use a credit score but using one with human underwriters (as opposed to a computer!) who your broker can speak to and explain the situation may help.

Is your broker any good? Does he have good experience? I only ask because I went to one through a national chain and his 'best' mortgage was waaaaaay worse than an independent broker who had 25 years experience! PM me if you want her contact details!

mimmum · 29/10/2013 21:35

Keep in mind that when a banke etc checks tour credit rating, this effects your rating and every time you apply for a mortgage and are turned down this will also negatively affect your rating. So only apply for mortgages you gave a v good chance of getting.

mimmum · 29/10/2013 21:38

I also second using a lender with human underwriters as opposed to a computer. Then you don't get the computer says no!

LoganMummy · 29/10/2013 21:42

Have you tried your local credit union?

Original poster

thinkofthemoney · 29/10/2013 21:57

I'm not sure if my broker is any good. He seemed to think we 'would sail through' the mortgage application and was shocked when we didn't.
He seems to think that there is no point explaining the reason for the debt.
We are doing the government equity loan scheme help to buy so restricted a bit on lenders.

OP posts:

icklekid · 30/10/2013 04:24

Why not pay off the debt from the deposit and then use the equity from the sale to increase the deposit again rather than the other way round? Surely this would avoid any credit rating problems?

icklekid · 30/10/2013 04:31

Sorry ignore me reread your post and the deposit is coming from the equity so not an option! Sorry!

theignored · 30/10/2013 04:49

we were turned down for two mortgages due to not having much spare cash once all bills were paid. we used endsleigh mortgage brokers and they were fantastic, they knew which mortgage providers didn't take childcare, pension payments etc into account when looking at outgoings. We got a very competitive mortgage deal.

vichill · 30/10/2013 05:06

This isn't a deal breaker for most sensible banks. The broker should be liaising with underwriter contacts at the bank to get you an agreement in principal which will have a condition in any mortgage offer that the debt must be repaid on completion. They might want proof it was used for education and not an expensive ongoing shoe addiction though.

Squiffyagain · 30/10/2013 05:17

call rating agency and tell them info is wrong - if they can see what you've done they may well correct it there and then on the phone. I've had them correct an error this way.
tell broker to get on phone to bank that turned you down
consider changing brokers

AShowerOfBastards · 30/10/2013 05:26

Where are you? We have an absolutely fantastic broker helping us at the moment, had all but given up getting a mortgage as everywhere we went looked at our situation (high Childcare & DH on 'zero hours' contract) and came up with very little to help. We're due to exchange tomorrow thanks to him, pm me of you'd like any details.

Either way credit card/debt movement will take a little while to show on your credit score, we got not to pay anything off while the application was going through as it wouldn't show up in time but the new card and its added 'available credit' would and that could go against us. Speak to your broker but once your old card is properly cancelled you should be able to try again.

SunnyUpNorth · 30/10/2013 07:57

Sorry to hijack but could the two posters who offered their broker details possibly pm them to me?

We have used the same broker for the last couple of mortgages we have needed but have been very underwhelmed with him. It would be good to have the name of someone decent for future reference. Thanks.

thinkofthemoney · 30/10/2013 13:17

This reply has been deleted

Message withdrawn at poster's request.

Flumpyflumps · 30/10/2013 13:26

I've sent you our broker details too, service amazing and very impressed.
Good luck, it's so disheartening.
I worked at this brokers office for years so can vouch for the service.

boobyooby · 30/10/2013 13:29

We were turned down this year by the bank DH has been with for years due to debts he took on from his first marriage. We used a broker a few months later and voila was offered a mortgage. We've never actually met the broker, everything was done via email and over the phone! Happy to pass the details on too, pm if you are interested.

HaveToWearHeels · 31/10/2013 16:02

Your broker should be contacting the original lender and speaking to the underwriters and explain the situation. As someone else has said up thread every time your are credit checked this goes against your score and it sounds a bit to me like he is just desperately throwing out applications. It is for just reasons like this you need a broker.
I had a similar problem with an "arrangement" on my credit file from years ago, broker just called underwriter, underwriter said to put in a paper application and he would approve. She didn't even bother doing an online application as she knew it would get rejected. DH and I have used her numerous times, she is fantastic. If anyone in Berkshire wants her details let me know.

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