I have just been accepted for a mortgage and as the bank are lending me 100% they will not add onto and consolidate some other small debts that i have got.
The debts i have got arent dreadful but come out of my account all thoughout the month and i never know where i am although i have never missed a payment.
I have since tried for a loan with Northern Rock and got turned down and then a week later i tried my own bank and have just been turned down again.
The mortgage is still going through (although paperwork been signed and accepted) and the property im purchasing still isnt in my name. I am just a bit lost as to why i am now being refused a loan when i have just recieved a mortgage.
Can anyone put light on this for me? Has this happened to anyone else?
2007-05-16 02:57:46 · 5 answers · asked by Anonymous in Business & Finance ➔ Credit
When I tried moving my bank from HSBC to Halifax I got refused. This wasn't because of bad credit, but because I had the maximum no of credit searches done in a certain period of time. I had been trying to find a cheap loan online so was credit checked each time. This resulted in me being turned down by the bank.
If you got your mortgage through a mortgage broker / advisor, it may have been that they searched a number of different providers for the best deal, using up the amount of checks you can have in a short period of time.
One way to check this is to use experian. I think it costs about £7 and it gives you a full breakdown of your credit history / rating.
2007-05-16 03:14:25 · answer #1 · answered by Flossy 2 · 1⤊ 0⤋
It's the difference between a 'secured' loan (Mortgage) and an 'unsecured' loan.
Secured loans are easier to get because if you can't pay the loan, they can take whatever item the loan is secured on (House, Car, TV, Computer etc)
The fact that the bank will not give you more than 100% Mortgage is clue that your Credit Rating is poor (I assume when you applied for the other loans you did tell them it was a 'consolidation' loan ? - i.e. you intended to pay off the other loans with the money ? Otherwise all they see is you have too many loans already and no way can you afford to repay yet another loan...)
The bank Mortgage is secured on your house - if you don't pay, then Bank can get it's money back by taking your house.
The other loans you applied for would be 'unsecured' ... if you don't pay they can only get their money back by making you 'bankrupt' or sending in the Bailiffs.
This takes a long time - and then, if you don't have enough 'assets' to pay all your debts, they will only get some fraction of their money back.
So it's higher risk for the lender so they want to see a higher Credit rating.
2007-05-16 10:14:28 · answer #2 · answered by Steve B 7 · 1⤊ 1⤋
The mortgage is probably the reason you cannot get another loan right now. If you just took out a 100% mortgage and then turn around and go to other banks requesting more money, that looks suspicious. Also, they will look at your debt and do a ratio to determine if you are eligible for a loan. You should wait a while before applying for a loan since you just got a mortgage.
2007-05-16 10:01:46 · answer #3 · answered by rockinout 4 · 3⤊ 0⤋
Talk to the other people you owe money too and change the payment plans. They will be more than happy to help even if it just moving the dates that the payments come out of your account. A few hours sorting out when it's best for you to pay, how much and when could save you getting another loan.
2007-05-16 10:10:47 · answer #4 · answered by thecharleslloyd 7 · 1⤊ 0⤋
Put really simply, you've just upped your outstanding credit considerably, and haven't proven (nor had the chance to prove) that you are going to be a good repayer yet.
Once you become a reliable repayer, your credit rating will probably become even better than it was before.
2007-05-16 19:06:41 · answer #5 · answered by John W 3 · 0⤊ 0⤋