HELP - at risk of mortgage offer withdrawal

LizzieC2024

Can anyone help?? Halifax offer at risk of withdrawal 

Hi all,

I’m new here, but would appreciate some advice at what is a stressful and anxious time.

My husband and I applied for a mortgage with Halifax and received our AIP 25th jan, full app went in on 5th Feb and full mortgage offer received 8th Feb (record time!). 

We’re borrowing £455k on a 95% LTV with almost £200k household income, BUT with a lot of long standing debts from before our income reached this level. Our AIP said

We could have borrowed £550k based on existing commitments. We disclosed ALL debts and outgoings.

Last week I went into my Experian to see my score had dropped as I wasn’t showing as being on the electoral roll when I am. I realised I hadn’t updated my maiden name on my Experian account to my married name, nor had I updated my address to my current address (where I’ve lived for a year now).

Experian clearly then did a re-scrape of my info, causing my score to drop from 905 to 650 overnight !!!! It’s because a credit card balance of £12,000 (0% balance transfer I opened prior to applying for mortgage) was now showing on my file , causing my credit balance and utilisation to shoot up. That combined with the mortgage application has caused my credit score to plummet from ‘good’ to ‘poor’

My broker has said it’ll take 2-4 weeks to know whether Halifax will withdraw mortgage due to the frequency at which they pull data from CRAs. We’re due to exchange before that, but obviously I won’t be exchanging whilst there’s all this uncertainty as I don’t want to enter into being liable for losing the deposit due to mortgage withdrawal.

There are absolutely no changes to what I have declared at the time of application. I gave full balances of all debts and monthly payments that were accurate and up to date. 

I just wanted to ask a few things:

• how likely is it for a lender to withdraw a mortgage offer because of a score decrease after offer?
• If so, at what point do they tell you? My broker seems to think waiting is the best policy but that is obviously incredibly frightening and uncertain
• Has anyone else had this experience and managed to get the mortgage completed without going elsewhere?

Sadly, the 200 point drop in my credit score makes me very concerned that any lender will now give us a mortgage. 

elsien

I was always under the impression that lender’s were far more interested in actual credit history than they were in the CRA’s very variable scores. So if your files are not showing anything different in your credit history to what has already been declared to the mortgage company, I can’t see the numbers making a huge amount of difference. 

Have you put everything right now with regards to your name and address? 

Linus2864

Hi Lizzie,

If you pop over to the Credit File and Ratings forum you will see a sticky and numerous posts explaining that the numerical scores generated by the three main Credit Reference Agencies are not used by lenders.

No lender sees the scores and they are there mainly to encourage people to get stressed about a drop in the number and apply for loans recommended by the CRAs in the hope their number will increase.

Lenders are interested in your credit history (CCJs, defaults, outstanding loans etc) and they use the raw data in their own systems to make their own decisions.

Hope this helps.

L

LizzieC2024

Thanks for your advice

my only worry is that I did a couple of agreement in principle searches myself (soft search) with lenders that initially gave me an AIP and they’re now all saying declined…. So I do worry that this score change is going to impact my offer

MWT

LizzieC2024 said:

So I do worry that this score change is going to impact my offer

Just to repeat... the score you see on these sites is completely meaningless, forget about it.

What matters is that there should not be any debts or credit cards etc. that you have not already declared to your lender.

As long as you had already told the lender about that £12,000 0% balance there is nothing to worry about.

LizzieC2024

MWT said:

LizzieC2024 said:

So I do worry that this score change is going to impact my offer

Just to repeat... the score you see on these sites is completely meaningless, forget about it.

What matters is that there should not be any debts or credit cards etc. that you have not already declared to your lender.

As long as you had already told the lender about that £12,000 0% balance there is nothing to worry about.

Thank you for reassuring. I already declared this to the lender at AIP stage. There’s nothing undeclared. My broker has just been suggesting it could well be withdrawn if they do another search…

MWT

LizzieC2024 said:

MWT said:

LizzieC2024 said:

So I do worry that this score change is going to impact my offer

Just to repeat... the score you see on these sites is completely meaningless, forget about it.

What matters is that there should not be any debts or credit cards etc. that you have not already declared to your lender.

As long as you had already told the lender about that £12,000 0% balance there is nothing to worry about.

Thank you for reassuring. I already declared this to the lender at AIP stage. There’s nothing undeclared. My broker has just been suggesting it could well be withdrawn if they do another search…

Not sure why your broker would suggest that...

Personally I'd be asking the broker to explain why something that had already been declared to the lender would be a problem merely because it was correctly showing on a credit report.

If the broker is saying it is because your Experian credit score has changed, I'd be looking for a different broker in the future...

ACG

As far as I am aware Hlifax do not use the score from your credit reports. 
If you disclosed all of the debt including the £12k, I do not see what the problem is as all material information has been disclosed correctly. 

It is difficult to say with 100% confidence, but I do not see the problem. Maybe you could just arrange to exchange and complete at the same time, your solicitor may charge you more but it removes the risk factor. 

LizzieC2024

ACG said:

As far as I am aware Hlifax do not use the score from your credit reports. 
If you disclosed all of the debt including the £12k, I do not see what the problem is as all material information has been disclosed correctly. 

It is difficult to say with 100% confidence, but I do not see the problem. Maybe you could just arrange to exchange and complete at the same time, your solicitor may charge you more but it removes the risk factor. 

That’s what I was looking to do, to alleviate the risk, but unfortunately, our sellers seller makes that impossible, as the house they’re selling is a deceased estate. They are in Australia and refusing to book a flight back to the UK to clear the possessions within the house until we’ve exchanged contracts, and needs a month in between that ! We’re supposed to be exchanging next week…. And completing end April 

ACG

Can your solicitor put something in the contract that covers you should your mortgage offer be withdrawn? 
Im all out of ideas after that. 

MWT

I would still suggest talking to the broker to find out what is prompting their concern and to see if it is specific recent experience with this lender or just a generalised cautionary statement to avoid saying 'there is nothing to worry about' as of course they are being necessarily cautious about their liability if the lender did pull the offer even if unconnected to the Experian change..