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Agreement in principle given now application declined???

Last post Thu, Sep 13 2012, 1:52 PM by josh_s_87. 12 replies.
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  •  Thu, Sep 13 2012, 1:52 PM

    Re: Agreement in principle given now application declined???

    Congrats and good luck with HSBC. I have just exchanged on a purchase with HSBC as my mortgage provider. They are not as bad as you think. I was 100% honest at the start as I started a new job. Underwriter was totally fine with it as we were honest from the get go.

    I would say the process takes a while but once its agreed the solicitors are well on it.

    Good luck and just dont panic

    • Post Points: 5
  •  Mon, Sep 10 2012, 6:54 PM

    Re: Agreement in principle given now application declined???

    Congratulations, you must be so relieved! I'm also waiting for a decision on a HSBC mortgage application and I have to say I'm not enjoying it as I've read so many negative responses, but for those who have managed to get through and obtain the mortgage well done for percevering and not giving up hope!
    • Post Points: 20
  •  Mon, Sep 10 2012, 5:58 PM

    Re: Agreement in principle given now application declined???

    Well I was right I had been fully checked, and it was a system error, all sorted now and the mortgage is good to go :-D
    • Post Points: 20
  •  Mon, Sep 10 2012, 12:51 PM

    Re: Agreement in principle given now application declined???

    Your AIP went to a "Refer" decision which means it could not autopmatically give a Yes or No answer. This may be because of notes placed on your credit file or something that was not clear cut on your credit file. The refer decision will have been reviewed by human eyes but unlikely it was an underwriter....just somebody with a buit of understanding of mortgage criteria.

    Once you have reached this point and a decision is then given (such as a yes or pass) then it will be passed to the underwriters for assessment and not before. I cannot say what it would be that has caused you the problem but idf you say that your income is high enough (Coventry use an income multiple of 3.6x income (joint or single) then it will likely be the arrangemwnt that you had in the past. Coventry do accept a small amount of adverse credit but it could be that on further investigation they felt that your case was just putside their remit and they have declined due to this.

    Speak to your broker or to the BS and see if they can give you a clear explanation orf what has caused the decline but i would recommned against appealing and absolutely wopuld not write a complaint to the FSA for this as it will only receive a standard letter reply.

    For your next application in would strongly advise that you use a mortgage broker or financial adviser as you do not want to go through another credit check without a pass or you may start to struggle to get through any further credit checks beyond this.

    Good Luck

    • Post Points: 20
  •  Mon, Sep 10 2012, 6:32 AM

    Re: Agreement in principle given now application declined???

    But if you read below my AIP had to be agreed by an underwriter as I failed the automatic AIP check.

    The underwriter took several days to review and came back with several questions before he agreed the AIP, and they told me another credit check wouldn't be needed once it went to a full application.

    And on speaking with the coventry today it seems my case went through the automated application check and nowhere near an underwriter, it has now been referred to an underwriter.
    • Post Points: 20
  •  Sun, Sep 09 2012, 10:57 PM

    Re: Agreement in principle given now application declined???

    harry 1958:. I have already had a full underwriting check carried out to get the AIP..

    No you haven't gone through full underwiritng....you have just gone through an initial credit and affordability check.

    An AIP is an "Agreement in Principle" It is a cursory check of credit profile and affordability prior to an application being submitted. It is NOT a fully underwritten case. Most AIP's are automated and an answer is given within 30 sedconds of submission of information which is only name, address, date of birth, length of time at residence, employment, earnings, debt in place and previous adverse credit. This will usually give a yes or no asnswer "in principle" once you have this then a full application needs to be submitted along with any requested documentation. From here the underwriters will look at the case and will check residence and indentity against documentation and credit records, will recheck credit in detail and affordability against documentation provided such as payslips and bank statements.

    There could be many thing that the underwriter did not like with the case and they are normally very experienced in what they do.

    You will be welcome to appeal the case but I can tell you from my own experience that out of about 20 appeals I have placed for clients (some with Coventry/Godiva) I have only ever had one upheld.

    I cannot say what it is that the underwriters will have pulled up but they normally will have to evidence their reasons why they have decline a case for FSA records (not for yourself) but in doing so they normally have already built a rock solid case that will evidence against existing criteria why they feel the case cannot be taken on.

    It would be wise to find out why this has happened first before proceeding with any appeal. If you used a broker then it will normally be disclosed to them, maybe not in detail but enough to know where to start your appeal, if you went directly to Coventry / Godiva then you may need to write a letter to find out why you were given a decline.

    Good Luck

    • Post Points: 20
  •  Sun, Sep 09 2012, 4:06 PM

    Re: Agreement in principle given now application declined???

    My payslips don't show expenses as these are paid separately, if anything my payslips show I earn more than I told them as I based the App on the minimum I earn.

    I have already had a full underwriting check carried out to get the AIP.

    I have since spoken with them and whilst no underwriters or mortgage advisors are they today it seems the details are just entered into the computer and it automatically churns this letter out.

    I fully disclosed the arrangement I made to them I also included a letter from.the loan provider detailing it as they requested from me, they knew my full.circumstances and carried out a full credit check before approving the AIP.

    Its now been referred back to the underwriter so fingers crossed it goes through tomorrow...
    • Post Points: 20
  •  Sun, Sep 09 2012, 3:28 PM

    Re: Agreement in principle given now application declined???

    Coventry are not worried about what risk you posed to them previously, you have asked for a new mortgage arangement and it is this risk that they are dealing wit. Chances are that if you had presented them with an option to allow you 100% lending on an interest only basis they would have said no to that also but they were not given the chance to say no because you led them to that position through propertyy values or just plain circumstance.

    It could be any number of things that may lead a lender to say no. It could be that something on your payslips led them to believe that your income (net) may not be as large as you claim, this could be certain expenses that are paid that are not usable for income purposes, it could be that any pension payment leads you outside of affordability, it could be that while an initial credity check passed you, an underwriting credit check (which is far more detailed) may well say no due to finding out more information not disclosed on the intial AIP.

    The first thing the ombudsman will say if you contact them is to go through the complaints procedure until this is exhausted for which Coventry (quite rightly) will send in immediate "Final Response" saying that you application was outside their lending criteria. You may well take this to the ombudsman but I can tell you now 100% that the ombudsman will fall with the lender.

    The lender pretty well has the right to refuse any credit application if it feels that the risk posed to it is more than can be taken and that really is the end of that.You may write to Coventry and ask why the decision came against you and they may answer this for you but it will likely be something on payslips that has led to an affordability problem or more like it will be the "arrangement" that has been discovered and Coventry so not like this or the risk posed to it.

    • Post Points: 20
  •  Sun, Sep 09 2012, 7:47 AM

    Re: Agreement in principle given now application declined???

    But why give me an AIP in the first place that had gone through an underwriter and been fully credit checked knowing full well my credit history? Godiva even faxed the AIP to the estate agents themselves saying all is ok!

    Also I'm asking nothing to change on my current mortgage except the repayment mechanism and the address!
    • Post Points: 20
  •  Sun, Sep 09 2012, 3:31 AM

    Re: Agreement in principle given now application declined???

    harry 1958:

    Surely on a risk basis alone thats a no brainer?

    Yup. If you've had a recent "arrangement", then there's not much to consider. Either they charge you a lot or they say "no".

    • Post Points: 20
  •  Sun, Sep 09 2012, 3:02 AM

    Re: Agreement in principle given now application declined???

    I appreciate that, but I already have a mortgage with Godiva and they credit checked me and approved an agreement in principle a few weeks back, now in full application they are saying no?

    Also surely from a risk point of view I currently have a 100% interest only mortgage with them on a flat, and I'm asking to port that mortgage on a repayments basis at the same value to a house, but with £20k plus deposit and a LTV of less than 80%

    Surely on a risk basis alone thats a no brainer???
    • Post Points: 20
  •  Sun, Sep 09 2012, 2:50 AM

    Re: Agreement in principle given now application declined???

    harry 1958:

    had to set up some arrangements on my lending, thats all clear now

    That will all be forgotten about six years after it happened but, presumably, you didn't pay back all that was owed when it was due. A mortgage is a 20+ year committment and lenders will reject your application if your history suggests that you may not be willing to accept that.

    Choices now include renting, waiting 6 years after the arrangement, finding a lender who will charge a lot and buying without a mortgage.

    It might be worth having a chat with an independent mortgage advisor to confirm the figures/options.

    • Post Points: 20
  •  Sat, Sep 08 2012, 10:59 PM

    Agreement in principle given now application declined???

    I need some advice, last year I lost my job.so had to set up some arrangements on my lending, thats all clear now and I've been employed for 14 months now.

    I have a good job earning 42k a year.

    We need to move a we live in a one bed flat and have a baby.

    We have sold our flat and have a deposit of up to 27k.

    I have told all this to my mortgage comp (godiva mortgages) and after going through the underwriter they gave me an agreement in principle, I am not borrowing anymore money than I already have as a mortgage with them and my LTV ratio goes from 100% to under 80% I will also be changing from an interest only basis to a repayments basis.

    On this basis we have found a property and put an offer on it, we have instructed and paid solicitors and paid the fee to the Coventry, I have just had a letter from them saying my credit doesnt meet their lending criteria.

    Im confused the Underwriter has already credit checked me and Godiva sent my AIP to the estate agents im buying the house off.

    Now they are saying I dont meet their lending criteria???

    To recap I was totally honest about my credit rating and my problems last year, im not borrowing anymore money from them than they have already lent me and from their point of view surely this is far less risky for them a my LTV ratio is much much better.

    What are my options now? Im fuming tbh, im going to contact the Ombudsman as I dont understand what they are playing at?
    • Post Points: 20