Lenders reject nine out of 10 applicants – welcome to the 90 per cent loan
Monday 9th August 2010 - Full story
Banks and building societies are tripping over themselves to be seen as helping first-time buyers – arguably the most sidelined group of borrowers since credit crunch hit nearly three years ago.
Several lenders in recent months, including the Co-operative Bank, the Post Office and Yorkshire and Britannia building societies, have re-entered the 90 per cent loan to value market with some fanfare.
But the reality is that a large chunk of applicants are turned down for 90 per cent deals. For reasons of "commercial sensitivity" lenders operating in the arena refused to specify the exact proportion of declined loans. But, according to Ray Boulger, senior technical manager at broker John Charcol, at least one of the "big six" lenders (Lloyds, Santander, RBS, HSBC, Nationwide and Barclays) turns down a staggering 90 per cent of applicants.
"Basically, the higher the loan-to -value, the more likely it is that your application will be rejected," he says. "This is especially true with larger lenders that use their own credit scoring systems based on information accessed through a credit reference agency. The lender will give each applicant a score and if it's anything less than the one required for a 90 per cent mortgage deal, it's a case of 'the computer says no'."
Source Independant
By Laura Howard, Sunday, 1 August 2010
