refused mortgage what now?

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Babsi

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I'm new to this site and really would appreciate any help on this matter! We applied to AIB for a mortgage of 275000 and were approved in principal - they have come back to say they wont be continuing with the application as there was no build up of savings and one of our accounts was over drawn by 43 euro in May (with overdraft facility) ?????
We have no loans, 20,000 in savings (received a lumpsum). We were approved by 2 banks last year when we were 25000 in debt. We are in the process of selling our previous home and will have a further 20,000 profit from the sale.

The house we want is 290,000. We both have jobs, one being a civil service job and have 2 children.

What do we do from here? Or does anyone know who we can apply to that will not refuse because of no 'savings build up'. Sorry for long post!!
 
Babsi said:
We were approved by 2 banks last year
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What did the other bank say?

The simple answer to your question is to apply to the other lenders. AIB are strict at the moment as they have the best rates and are receiving many application thus can cherry pick the best ones.

Will your previous house be sold before the purchase of the new one?
 
Firstly, thank you for your reply. The other bank (Haven and IIB) had approved us last year before all this madness!!! and then dropped their ltv to 80%. We couldnt afford to come up with 20% of the difference. This time around we applied through a broker and they were shocked when AIB came back today and said no as they thought it was a done deal. They had all our statements etc since last week and were only waiting on my partners p60. I'm just afraid no-one will give us any money and our house is being sold. We are waiting on Dublin City Council to finalise cheque as they are giving the purchaser of my house a mortgage. That could take a while but hopefully it should be all done before we need to draw down on our mortgage - if we get one!!! Everything is ready to go - our solicitor has signed contracts and bank draft for new house.
 
Im in the same kind of 'refused mortgage' boat as OP.

Just received confirmation by post today that my application for a 100k mortage was rejected. I make 30k a year, own 2 small yet profitable businesses, owe about 5k personally in total and am currently living rent free. I have 10k deposit saved and AIB are not interested!
(I gernarally bank with BOI, however, AIB are the only ones that would quote on a mortage below 150k)

Mortage repayments on the above ammount are 100quid (approx) a week!

Do i bother wasting my time applying to other banks or just buy a night on the town with my 10k???
 
All I can advise is get to a broker. They will apply to a lot of banks for you quicker than you could yourself. I got my mortgage through a broker, looking back as it was straightforward I should have done it myself but if you have a dealine, then you need to get applications into banks asap. Have AIB returned your file?
 
Thanks for that - Broker told me she is applying to other banks today so they must have returned all documents etc. I'm just surprised that it was 'a done deal' and then came up with a lame excuse for not continuing with the application. I will keep applying to everyone and anyone!!! Just wanted to hear if anyone applied to other lenders and were successful in the last few weeks.
 
Im just in the process of sending off my application to permanent tsb. A 'friend' who works in finance said they may be a better option than the bigger 'tax-payer-funded' institutions?
 
Um Babsi, that is a pretty serious position to be in! You have the contract signed, I'd suggest it would be worth chasing up harder with AIB, you had approval in principle and on that basis, in good faith you have signed a contract. Their withdrawl at this point puts you in a much more difficult position. I know you have been going through your broker but I'd be inclined to start chasing myself as well.
 
so-crates said:
you had approval in principle and on that basis, in good faith you have signed a contract.
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You should NEVER sign contracts until you have a sanctioned mortgage for this very reason. I'm amazed your solicitor allowed you to sign contracts without finance being in place. Once you sign contracts, you normally can't back out without financial loss.

These days it's often the case that although you have AIP, when it comes to sanction the mortgage the bank might withdraw the offer, or offer a lesser amount.
 
Hi all, thanks for replies so far - The contracts & bank draft have not been returned to the vendor's solicitor yet so I'm okay there. Apparently an AIP is not worth the paper it's written on. As soon as we sent in all our statements, P60's etc they came back within hours and said no they did not want to continue with the application. I just hope we get approval elsewhere and quick!!!
 
Hi all, just an update and request for more information/advice please!!! Still waiting to hear back from broker re: ICS but in the meantime we got back our credit reports. Mine is ok but my partner missed 2 payments on an MBNA loan - it was paid in the same day but it is still listed as a missed payment. I know bad credit has an effect on mortgage applications but does anyone know will a bank overlook these? As per previous posts we were fully approved in 2008 but the banks we were approved by are only giving 80% LTV - we need 90to 92%. Any help on this would be great.
 
You're having a bad run of luck Babsi.

As for the credit report thing, I remember our application got refused due to missing payments on the credit card, and it was registered with the Credit Bureau. But while in his office with him, my broker made a call the the credit card company (can't remember who at the time), and I explained the situation to them saying I was being refused a mortgage over missing a payment 18 months previously. The girl on the phone couldn't believe that that would deny someone a mortgage, and she was able to get it removed from the system. How she did it, I don't know. But she did!
You might be able to do something similar?!
 
Looking at the figures, you are looking for 95% mortgage (275/290). AIB's policy in the past was 93% max so i think its going to be tough to get any lender to do 95% at the moment. If you could bring it less that 90% then you might stand a chance.
 
Babsi said:
Hi all, just an update and request for more information/advice please!!! Still waiting to hear back from broker re: ICS but in the meantime we got back our credit reports. Mine is ok but my partner missed 2 payments on an MBNA loan - it was paid in the same day but it is still listed as a missed payment. I know bad credit has an effect on mortgage applications but does anyone know will a bank overlook these? As per previous posts we were fully approved in 2008 but the banks we were approved by are only giving 80% LTV - we need 90to 92%. Any help on this would be great.
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Did the payment go in on due date? If yes and listed as missed get onto them to rectify this with ICB.

As far as I am aware under the Data Protection Acts they are obligated to note things like this and keep their records up to date to avoid situations like above.
 
TheBigD said:
You should NEVER sign contracts until you have a sanctioned mortgage for this very reason. I'm amazed your solicitor allowed you to sign contracts without finance being in place.
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Exactly, but for some crazy reason this seems be what's happening out there.

We are in the process of selling a house and the purchasers have took it upon themselves to sign the contracts even though they do not have mortgage approval in place.

Babsi, did your solicitor not ask to see your mortgage approval before he/she allowed you to sign?
 
Read the posts.

The Contracts have not been exchanged. There are no binding Contracts in existence.

mf
 
True, but they should still never be signed as a matter of principle imo. Also it gives the buyer false hope that it will def go thru. It's less of a blow I think if the solicitor tells them they can't sign until they def have the money, then allow them to sign and then find out later that can't proceed.
 
"It's less of a blow I think if the solicitor tells them they can't sign until they def have the money, then allow them to sign and then find out later that can't proceed. "

Solicitors are not your Mammy! They tell you what the story is - you make your own mind up. Its not a matter of telling them they can't and then "allowing" them to sign!

And its the same difference anyway since there are no binding contracts anyway until they are exchanged.

mf
 
OP you are putting too much pressure on yourself. Why don't you withdraw from the house you are about to purchase and wait for the sale of your house to go through. Then ask a bank how much they will lend you before bidding on another property that is more affordable based on your savings to mortgage ratio. You may in fact be able to bid on the house you have contracts for currently at a lower price. I'm not saying this for you to mess around the vendors of the current house for sale but you do not have mortgage approval and until you have that you are not really in the market for purchasing.
 
Babsi my advice would be to try halifax we had the same problem with aib got AIP everything was ok then they made up some really stupid excuse after weeks of stringing us along and said no went to halifax was approved in full within 2 wks mind you halifax dont deal with brokers you have to go through them yourself and the staff there coulnt be more friendly and helpful.
 
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