Affordability declined

[PrincessConsuela12]

Hi all,

I'm hoping someone can help, just over 3 weeks ago we put in an offer for a new build, we had a soft credit check & everything was fine, a few days later we had a (4 hour call) with the MA and were pleased with the option we were given, at the end of the call I asked what would happen if our mortgage application was declined & told that it absolutely wouldn't & we'd hear from them in a couple of weeks with an offer.
Since then we've had a few calls asking us to send further information (I am currently on maternity leave & have had to send older payslips, credit reports & a letter from HR confirming my start date).
Today I got a call to say the lender cannot loan us the sum we originally asked for & that someone had been trying to call us all weekend to go through the application with us again. This is not true, I haven't had a single missed call. We've also paid the broker quite a large sum of money to be a lifetime member as well as survey fees (which haven't taken place). We are waiting for a call from the MA which should be today but I'm very frustrated because we've had hard credit searches which is now on our file which could potentially look bad to other lenders & also cannot understand why the MA were so certain we were going to be approved. The lady who called today said our credit report looks fine & she couldn't understand why they won't lend the money to us.

Any advice on what our next steps should be?

Have you initially been declined and then gone onto get accepted elsewhere?

Did you ask why?

Is your mortgage advisor a whole of market independent broker? Also why did you pay them? Any I've ever known have taken their commission from the lender. It could be any number of reasons but really only the underwriter will be able to tell you why you were declined.

Yes did you ask for more details and did they tell you how much you would be accepted for?

How many times joint and only your husbands salary are you trying to borrow?

What is the payment you have already made? This sounds fishy.

Some mortgage advisors are totally crap so don't assume that everyone has done everything right... We had a mortgage application declined, my DH did a freedom of information request, and it turned out that they'd put his bonus as his salary, and numerous other cockups (including getting a rental valuation for the wrong property).
we ended up with a couple of grand in compensation!

Just to say I pay my mortgage advisor hes whole of market but I pay on completion of deal £500. It seems strange to pay upfront. Wait for info it could be any number of issues . Get data and see what they offer as next steps

A 'lifetime member' of what, exactly? Sounds dodgy.

I was declined following my fa trying to find me a mortgage (part of my income is disability benefits and some don't like that) I then went to Barclays bank directly and spoke directly to the same person for the whole process and they took my individual circumstances into consideration, I'd always used a fa previously but I'd do it myself again it was slightly more work but not difficult. I started with a comparison sight, then googled which banks accepted my individual circumstances and went from there.
When I got a mortgage 17 years ago I was pregnant and they did reduce the amount I could borrow because they took into account nursery fees/cost of child.
I'd start by finding out why they've refused you first and then go from there.

I'd imagine it's the fact that you're on maternity leave. But yes, lifetime membership of what? Your broker sounds iffy.

Our broker doesn't charge until after completion, very competitive rate of £250, and he would never advise us to apply for a product we would get declined for, that's literally his job. He always waits for credit checks after we have decided on a product, otherwise you can end up with a load of checks against your name unnecessarily. They are supposed to take the stress out of the process not make it more confusing. I would be expecting the broker to find a lender that can lend what you need. But it sounds as though they have no idea what products are on the market. If they knew the market you wouldn't have had the mortgage declined in the first place.

Thank you all.

We paid for a lifetime membership which means when we decide to move / our mortgage term comes to an end we won't need to pay the fees again & they'll contact us a few months before to get the ball rolling. When we initially spoke to the MA they were so confident & helpful that we were happy to go through the process with them in the future.

I did ask why but she was very vague & said it was affordability & that they hadn't given her much information. I'll ask when I get the callback later. It was completely out of the blue & she kept saying your advisor will call you later today so I didn't ask too many questions.

Due to me being on maternity only a few lenders would accept our application. This particular lender knew I was on maternity, how much I'll be on when I go back in a couple of months & I was assured it wouldn't be an issue.

I believe they are a whole market lender, they were the ones recommended by the company we're buying from.

We're asking for around 4x our joint salary. We're also using H2B so have around a 30% deposit.

What's annoyed me more than anything was our MA confidence & dismissing the question when I asked what happens if we get declined, plus them saying they'd tried to call me all weekend

I believe they are a whole market lender, they were the ones recommended by the company we're buying from.

You mean the estate agent recommended them? Sorry but you've been very naive - find your own broker. Or use a free one like money supermarket. And don't pay upfront. And certainly not a lifetime membership of something where you have no experience of the service they will offer you. Your estate agent has just made a stack of commission from you and you've nothing to show for it!

@PrincessConsuela12 are you sure it's the mortgage affordability and not the HTB affordability that's caused an issue? HTB is actually quite a bit stricter than mortgage affordability, I've heard of a few people falling at that stage, when I first read your post I was going to ask if you were using HTB then you mentioned it in your last post, I would get clarity because they're two very different things.

@titchy We're hoping to buy a new build & in order for us to book a viewing we were asked to contact this particular company to get pre approved. Our friends have just gone through the same company & had a good experience, I also did a bit of digging beforehand & was happy going forward with them. I'm just not sure if it's the particular people we've dealt with that are the problem

@user85963842 We've had the ATP from H2B so I don't think it's that but I'll check with them & double check. Thank you

[quote PrincessConsuela12]@titchy We're hoping to buy a new build & in order for us to book a viewing we were asked to contact this particular company to get pre approved. Our friends have just gone through the same company & had a good experience, I also did a bit of digging beforehand & was happy going forward with them. I'm just not sure if it's the particular people we've dealt with that are the problem[/quote]
OP I don't really have any advice for you but wanted to comment re Mortgage Advisors. I think we must have used the same / very similar service as DH and I also paid £500 - just to clarify for others, it's not payment for the mortgage advisor for their work as they still will receive their fee upon completion but a fee for lifetime membership with mortgage advisors within the group and financial advice / support. Far better service than we have ever received from any independent brokers, and believe me we tried a few!

@PrincessConsuela12 good luck, fingers crossed it's some kind of over sight or something that is fixable so you can get your house!

If you have had the ATP through from help to buy then you have passed the affordability with them.
I would get it re looked at. Sounds like the wrong figure has been put in the wrong box to me

Thank you @user85963842

@PearsandPartridge Thank you, written a lot better than my waffling! We also paid £500 so you could be right & it is the same company.

@thetigerthatcamefortea I'm hoping to get answers later. I naively wasn't expecting that call today & when I asked for an explanation she couldn't give one which threw me off

To be honest it seems like you were given bad information, unless you have free childcare they will be very concerned about affordability at 4X pre pregnancy salary. When we bought we could only borrow a max 2.5x combined salary if we had children under 5, 3x for children 5-12 and 4X for no kids/over 12.

@mootymoo depends on the lender, NatWest don't factor childcare into affordability (at least they didn't pre pandemic unless it's changed).

@mootymoo We don't have free childcare but did tell them how much it would be, they added this to our application. It's not a huge amount luckily but I'm not sure if that makes too much of a difference

We have used London and Country for at least 16 years. They are free, whole of the market and are recommended by MoneySavingExpert.

Never paid them a single penny because they get their fee from the lender when the mortgage completes like all mortgage advisers do. They just don't charge a fee on top.

It is awful you have been swayed into the whole speak to our in house mortgage adviser. Always get your own.

@OnTheBenchOfDoom I've heard some good things about L&C so may speak to them depending on the outcome of my call later.