Getting a first time mortgage
Or not, as the case may be.

I'm 26, and earn a shade under 40 grand a year. I have 10k saved up, and would like to buy a cheap little place. Living in a cheap area of the country, I've seen some decent little houses for the 60-70k mark. My credit file is spotless (really - all zeroes). I have a couple of credit cards including an AmEx that's paid off in full each month. The limits on the two cards total £9k. FWIW, I had one credit card which I got rid of last year which had a 23k limit on it (ie before the credit crunch). I rate tart for 0%, if you're wondering about the credit cards. The AmEx is for cashback. Anyway... Contract mobile for the last 8 years. One current account, which at the mo has 5 grand in it.

My job? I'm a permanent (ie not on a 3 year contract or owt) employee in management at an academic institution. I own my car outright. I have no debt.

My rent: 600 quid a month. Plus bills. My mortgage would be around 450. Obviously, plus bills. I'd say it's fairly obvious I can afford said mortgage.

So, I applied for a mortgage. Thought I'd start with a look at 60 grand.

Mortgage application at the broker: Outright declined.
Mortgage application at the bank that I've had my current account with for the last 8 years: Outright declined.

Tell me, please, how am I a bad risk? I'd love to know.
( shadyron, Thu 16 Jul 2009, 23:21, 12 replies)

Dunno Mate
But its the wrong time for mortgage applications. I was in a very similar situation to you in mid 2007, and I got a £190k mortgage for a £210 place in Hertfordshire.

I still haven't missed a payment (yet!)
(powervator and NONE SHALL PASS, Thu 16 Jul 2009, 23:31, closed)

calling yourself shady ron
may have given the wrong impression...
( Smash Monkey lowering the tone of the whole internet, Thu 16 Jul 2009, 23:42, closed)

Lightbulb
It seems so obvious now!
( shadyron, Fri 17 Jul 2009, 1:59, closed)

WTF?
so you have a 14% deposit with what looks like a perfect credit history and you are asking to borrow just over 1.5 times your annual salary? You seem like the safest bet for a mortgage ever. Maybe their problem is loan to value, maybe borrowing a few grand from a relative would be a good idea. I am a major property bear so wouldn't normally recommend that sort of thing but it looks as if you'd be saving £150 a month by buying, and with such a small mortgage if you overpaid by that £150 every month you'd be mortgage free in no time.
(mmm....beer, Thu 16 Jul 2009, 23:43, closed)

Thing is
There's an utter shed of a property round here. In fact, there's a few. I can buy a flat for 10-15 grand. They need a fuckton of work doing, but I'm seriously considering buying it outright, saving the 600 quid a month off the rent, and doing it up as I live there.

(Top Gear)How hard can it be?
( shadyron, Fri 17 Jul 2009, 1:53, closed)

Call 'em back now
Mid GFC the banks are offering everything up to a happy finish in the car park* to get people signed up.

*Actually I think Westpac in Australia does offer that.
( difficultchild, Fri 17 Jul 2009, 0:43, closed)

You know why it is?
Because you pay off your credit cards each month.

If you let them build up a bit of a debt, then you will get a higher rating, because you are demonstrating that you can service a debt.

It's a fucking stupid system, but that's how it works!
( K2k6 has a proper job these days, Fri 17 Jul 2009, 8:20, closed)

^this
Buy yourself a CD, a videogame, a Big Mac Meal, with a credit card. Let it sit on there for a while, and pay the extra £1 or less it might accumulate in 6 months.

Then ask the bank for £60,000 based on your ability to manage a burger-derived debt. They will, absurdly, probably say yes. Good luck!
(sabre-tooth monkey, Fri 17 Jul 2009, 15:20, closed)

Sad but true
Yeah, I was told the same thing - banks don't trust people who don't already have debt.
(Supermonkey, Wed 22 Jul 2009, 0:14, closed)

presumably, you're on the electoral roll?

( Mighty Nibus who dares gins | @nibus, Sun 19 Jul 2009, 13:48, closed)

Zeros
You state that you have a perfect credit score with all zeros? Well to a credit company that can go against you simply because you haven't had any borrowing history. My housemate has a cash card so he can take money out of an atm but can't use it to buy things in shops or online, has never had a loan, payg phone and pays for everything in cash. So he has a credit score of zero too, this has gone against him as he has no way of showing how he would deal with debt. He can't even get an Argos store card even though he gets paid £250 a week into his account.
I wish that I was like him and never got involved with borrowing money in the first place.
(Soaps Roller derbying your way since, Mon 20 Jul 2009, 14:45, closed)

It's the zeros
As said, it is because you have never been in debt at all that you are getting declined. You need to have some debt so they can see whether you are a good borrower. Remember, someone who is never in debt never makes the lenders any money. This is why people with lots of debt find it easy to get more..

Also, if you are going for a mortgage find a good independent mortgage advisor to sort it out for you, they can search though much more offers than you or a local bank can. You don't usually have to pay them as they will almost always take commission from the lender as payment. They'll sort it all out for you too all the way up to completion essentially for free.
(stubbledchin, Thu 23 Jul 2009, 11:03, closed)