Mortgages

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Swervin_Mervin
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Re: Mortgages

Post by Swervin_Mervin »

Gavin wrote: Fri Jun 11, 2021 10:21 am
GG. wrote: Fri Jun 11, 2021 9:43 am Well this was a pointless thread! Couple with no deposit can't get a mortgage non-shocker.

Banks haven't lent at 100% LTV for 13 years. 95% mortgages are available only in limited circumstances and most banks would have a cap on how much they will lend at that level (same for salary multiples on an affordability basis).
No, this is me moaning in a moaning thread as I wanted to moan. I know why they cannot get one, I worked in a bank and know they are a high risk, I just think it is crap.
It is crap. It's never made any sense to me why a good history of rental payments can't be taken into account by banks. I understand they have to have fairly strict rules, but that one is particularly dumb. Afterall, at its basic level, a credit rating is only that anyway - a documented history of being able to make payments.
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GG.
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Re: Mortgages

Post by GG. »

Yes but the fact they haven't saved anything means their disposable income after rent is either too low to do so or they lack the discipline. Neither things a Lender wants to make a punt on and this is the real reason they've been declined.

As to taking into account rent as "credit" for the purpose of a rating - I agree. If utility bills are deemed as credit then so is a lease or other rental agreement.
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Holley
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Re: Mortgages

Post by Holley »

Swervin_Mervin wrote: Fri Jun 11, 2021 10:22 am
Holley wrote: Fri Jun 11, 2021 9:59 am Yep 95% mortgages is the lowest you can have, but clients need to be credit healthy.

@Swervin_Mervin Have you tried Coventry? Some Building Societies take into account your net profit as well as salaries/dividends for limited company owners.
This is just for extra borrowing hence we're dealing with our current BS. They supposedly take into account net profit, but the fact our 2nd year profits were down on the 1st year (still very, very decent though) they took as an excuse to say they couldn't take my earnings into account at all. I've had to go to great lengths to explain the reasons why (mostly because we paid 1st year pensions and 3mo of salary out in our 2nd year). I'm still not convinced they're taking my earnings into account as they seemed more interested in additional elements of the wife's remuneration package :lol:
Are you tied to them?
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Rich B
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Re: Mortgages

Post by Rich B »

Gavin wrote: Fri Jun 11, 2021 10:21 am
GG. wrote: Fri Jun 11, 2021 9:43 am Well this was a pointless thread! Couple with no deposit can't get a mortgage non-shocker.

Banks haven't lent at 100% LTV for 13 years. 95% mortgages are available only in limited circumstances and most banks would have a cap on how much they will lend at that level (same for salary multiples on an affordability basis).
No, this is me moaning in a moaning thread as I wanted to moan. I know why they cannot get one, I worked in a bank and know they are a high risk, I just think it is crap.

I wasn't looking for solutions or dickish answers, but true to form...
Lend them the money yourself then.
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dinny_g
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Re: Mortgages

Post by dinny_g »

Lenders have to report on their customer at the point of application (as Multiple applications for credit can reduce credit worthiness) and also at each month end.

Reporting at each month end is a condition of being allowed to obtain the credit worthiness rating up front and it's in every lenders interest to contribute to the process as they get access to every other lender's information "I'll show you mine and you show me yours" is an expression often used.

It simply isn't practical to try to include the rental sector in the current credit reference agency system. Remember, it's not there to try to get you a loan - it exists for the benefit of the lenders to reduce the risks of default.

It would need to be another mechanism - don't know what mind. Central register of Rental Property and Tenants ??
JLv3.0 wrote: Thu Jun 21, 2018 4:26 pm I say this rarely Dave, but listen to Dinny because he's right.
Rich B wrote: Thu Jun 02, 2022 1:57 pm but Dinny was right…
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Swervin_Mervin
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Re: Mortgages

Post by Swervin_Mervin »

Holley wrote: Fri Jun 11, 2021 10:30 am
Swervin_Mervin wrote: Fri Jun 11, 2021 10:22 am
Holley wrote: Fri Jun 11, 2021 9:59 am Yep 95% mortgages is the lowest you can have, but clients need to be credit healthy.

@Swervin_Mervin Have you tried Coventry? Some Building Societies take into account your net profit as well as salaries/dividends for limited company owners.
This is just for extra borrowing hence we're dealing with our current BS. They supposedly take into account net profit, but the fact our 2nd year profits were down on the 1st year (still very, very decent though) they took as an excuse to say they couldn't take my earnings into account at all. I've had to go to great lengths to explain the reasons why (mostly because we paid 1st year pensions and 3mo of salary out in our 2nd year). I'm still not convinced they're taking my earnings into account as they seemed more interested in additional elements of the wife's remuneration package :lol:
Are you tied to them?
'til March next year, yep. I've just chased them actually, so hopefully the underwriting team will get back to me today. I still expect some trouble, but that's just my cynicism of this whole project so far tbh :lol:

Depending on how they handle it, it may well have a significant bearing on whether we stay with them next March.
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Brannen
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Re: Mortgages

Post by Brannen »

I went through the whole process at the beginning of the year, I had to have a 15% deposit for the mortgage I could get.

I had put in the housing update thread replying to Dinny, the people I was buying from decided to not sell the day we were exchanging which was a load of shite. If I can find something again (harder with the prices still rising), I'll have to go through the whole applying process again, which is thoroughly frustrating!
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GG.
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Re: Mortgages

Post by GG. »

dinny_g wrote: Fri Jun 11, 2021 10:40 am Lenders have to report on their customer at the point of application (as Multiple applications for credit can reduce credit worthiness) and also at each month end.

Reporting at each month end is a condition of being allowed to obtain the credit worthiness rating up front and it's in every lenders interest to contribute to the process as they get access to every other lender's information "I'll show you mine and you show me yours" is an expression often used.

It simply isn't practical to try to include the rental sector in the current credit reference agency system. Remember, it's not there to try to get you a loan - it exists for the benefit of the lenders to reduce the risks of default.

It would need to be another mechanism - don't know what mind. Central register of Rental Property and Tenants ??
Good point - it would be additional administration certainly but landlords could be required to notify the CRAs on entry into a new lease agreement and again on any default in payment. I guess that it is imperfect as the landlord may not bother to notify, but that could easily be addressed if you introduced a rule that any forfeiture or demand for late payment of rent is impermissible unless notification has been made to the CRAs - I imagine that would certainly ensure landlords did it.

Its probably unnecessary though as if you have credit cards and use/pay them off regularly you can build up a footprint with the CRAs and get a good rating that way. The difficult ones are renters with no credit history as in this example - but then again they are people that bank would likely want to exclude anyway.
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Swervin_Mervin
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Re: Mortgages

Post by Swervin_Mervin »

TBH there are various aspects of the rental sector that need a fvcking good shake up imo.

It would still depend on the lenders actually bothering to look at the data as well. I mean ours hadn't even looked at the fact that we overpay, and that's on their own fecking systems ffs. There was a lightbulb moment when I pointed out that the monthly repayments on the extra borrowing would be less than we overpay...
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Holley
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Re: Mortgages

Post by Holley »

Swervin_Mervin wrote: Fri Jun 11, 2021 10:48 am
Holley wrote: Fri Jun 11, 2021 10:30 am
Swervin_Mervin wrote: Fri Jun 11, 2021 10:22 am

This is just for extra borrowing hence we're dealing with our current BS. They supposedly take into account net profit, but the fact our 2nd year profits were down on the 1st year (still very, very decent though) they took as an excuse to say they couldn't take my earnings into account at all. I've had to go to great lengths to explain the reasons why (mostly because we paid 1st year pensions and 3mo of salary out in our 2nd year). I'm still not convinced they're taking my earnings into account as they seemed more interested in additional elements of the wife's remuneration package :lol:
Are you tied to them?
'til March next year, yep. I've just chased them actually, so hopefully the underwriting team will get back to me today. I still expect some trouble, but that's just my cynicism of this whole project so far tbh :lol:

Depending on how they handle it, it may well have a significant bearing on whether we stay with them next March.
Fingers crossed 8-)

If it doesn't work out you could look at doing a second mortgage to run alongside your existing (I'd only really look at that if you couldn't wait till March)
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