How would I fair in a credit check?

CheeseOnToast

I am applying for a mortgage next month (hopefully) - Provided my Notice of Correction goes through I will be left with a couple of missed payments around a year ago, and the highest balance on a card being 900 on a card with a 950 limit.

Will I be OK going for it still? A lot of people have said it's mainly defaults and arrears they look for?

Thanks,

Phil

HelpWhereIcan

Would have thought you should be ok with the majority of lenders as most should be ok with a couple of missed (or late) payments on loans/credit cards fromabout a year ago. If they were mortgage payments, then that may be another issue. Having said that, some lender's credit searches only pick up defaults and ccjs and not a 'payment profile' so you should be ok getting a prime rate.

Having said that, I have to qualify my comments by adding that most lenders operate a 'credit scoring' automated decision making process that builds a score based on your overall profile (length of time in job, address history, type of employment etc etc) to decide whether or not you fit their predetermined customer profile so you will have to pass their score as well. You do not have one score and even though one lender may say no, there will be others who will say yes

Hope this helps

CheeseOnToast

Thanks mate - It all started badly last year, I passed a credit check with Halifax but the property fell through, a few months later found another.. left it til last minute, phoned Halifax.. failed!!

An account was (wrongly) in arrears so I can only assume it was that which caused it. My mum got the mortgage in her name but now I am transferring it. Unfortunately I am stuck with 2K redemption fees but it can't be helped now unless I can wait another year which due to some personal circumstances for my mum I can't.

The payments were from credit card and a store card.

If I do get knocked back do you know any which only check for ccjs etc?

I don't know if you know but is there any way I can avoid the majority of legal fees etc as I'm buying the house directly off a relative or will it still all need to be done?

At the moment my biggest concern is getting a 3 payment late record from last month removed as it also shows as a deliquent date.. which is rubbish. Fingers crossed.

Sorry to babble but if it all goes through I am rolling my car and loan into the new mortgage amount and should save around £350 p/m!

HelpWhereIcan

CheeseOnToast wrote:

The payments were from credit card and a store card.

Should be ok if they are a year old.

CheeseOnToast wrote:

If I do get knocked back do you know any which only check for ccjs etc?

Quick answer is yes, but would not want you to think that I am reccomending them to you without knowing all the facts as from what you have posted so far there are many lenders who will arrange a mortgage for you. Would need to know moreabout loan amount, income, property value etc etc.

CheeseOnToast wrote:

I don't know if you know but is there any way I can avoid the majority of legal fees etc as I'm buying the house directly off a relative or will it still all need to be done?

Not that I am aware of - will all still need to be done as normal.

CheeseOnToast wrote:

At the moment my biggest concern is getting a 3 payment late record from last month removed as it also shows as a deliquent date.. which is rubbish. Fingers crossed.

Some lenders may treat this as a default (because it has a deliquent date). What do you mean from last month - is that when you settled it or when the 3rd payment was missed. Please elaborate.

CheeseOnToast wrote:

Sorry to babble but if it all goes through I am rolling my car and loan into the new mortgage amount and should save around £350 p/m!

Just make sure you are happy with the knowledge that you will pay it back over a longer period and therefore pay more in interest. :-)

Best of luck with your current application. Who is it with and what's the latest?

Hope this helps

CheeseOnToast

Right the deliquent date shows as 10/05 but settled in 29/05. I am in dispute with the company at present as they didn't update my address and send me a statement of affairs, and it certainly was never delinquent anyway.. I am really hoping this will be removed - At worst I would imagine it will show late payments (unfortunately recent).

I am not even sure I will score the amount for what I want but here are the general basics of what I am looking for:

Value of Property: £90,000 (provided they will value at that amount)
Loan Requested: £85,500 (95% LTV)
Standard Income: £20,400
Outgoings: £25 p/m C/C
Loan: £180 p/m

Here's where it gets tricky though.

I am on-call once every two months which earns me another £195 roughly 1000 p/a.

I cover a minimum of two shifts for colleagues earning between £150-£200 per shift. Some months I do a lot more than that.

My company offer a 'Home Buyer' bonus where if I buy a property I get an 8% increase to Salary for 4 years which works out as an extra £1360

I'm hoping most companies will allow me to use those bonuses as part of the calculations. Also I know some companies will add up previous 3 payslips and work out an average annual salary, mine would be between 28-30K p/a based on that principle.

The other thing is that I am only actually paying £75,500 for the house, the rest I am using to clear existing debts which broken down are:

Egg - 3500
HSBC - 2000
Mortgage Redemption - 2000
Owed to Mum - 1000
Car - 3000

Only the HSBC is the one I need to declare though which some companies only want you to declare if it's not clear 12 months from taking the mortgage out - even if I wasn't going to clear it with the extra cash (which I am) it would be clear in exactly 12 months from end of March

Any advice I am grateful of, I am currently not in an application as I am waiting to get this Notice of Correction sorted and my 1 year redemptions fees are up on March 25th. The cheapest I can find are places are Yorkshire BS and Portman BS as found when running the compare tool on money.msn.co.uk

I know I will be paying more interest etc but at the moment my outgoings are un-sustainable for an extended period, doing this 'deal' will mean I can cover outgoings without the need for any overtime etc.

HelpWhereIcan

CheeseOnToast wrote:

Right the deliquent date shows as 10/05 but settled in 29/05. I am in dispute with the company at present

Unfortunately, unless you are able to provide documentary evidence to support your argument, a lender will assume that the information is correct until it is removd/corrected by the lender who registered it. The fact that it shows as settled is preferable to it being outstanding. A whole of market broker could look at your file and match the information to a lender who would be sympathetic or ignore it.

However, based on what you have posted, the loan amount you require should be achieveable

CheeseOnToast wrote:

The other thing is that I am only actually paying £75,500 for the house, the rest I am using to clear existing debts

This is something that could cause you problems. Some lenders will restrict the maximum loan to the price you are paying (or a % of it) and will not automatically allow extra borrowing to pay off your debts even though the house may be worth more than you are paying.

There are lenders who will base the amount you can borrow on what the property is worth. You would need to use one of these lenders and make sure that the lender is aware of how you plan to use all the money. ie. 75k to your mum and the rest to repay debts, home improvements etc.

CheeseOnToast wrote:

HSBC is the one I need to declare though which some companies only want you to declare if it's not clear 12 months from taking the mortgage out

You will need to ALL your debts and let the lender know which ones you plan to settle. That way, once the lender has matched the information you give them to what they can see on your file, they will ignore the debts you have told them will be repaid.

CheeseOnToast wrote:

Any advice I am grateful of, I am currently not in an application as I am waiting to get this Notice of Correction sorted and my 1 year redemptions fees are up on March 25th. The cheapest I can find are places are Yorkshire BS and Portman BS as found when running the compare tool on money.msn.co.uk

Based on what you have told me, what you want to do should be possible.

Sorry I can't get any more specific. Unfortunately, it is getting to the point where any further information I may give you could be seen as advice pointing you towards a specific lender. I will say that I would expect that your chances of getting a deal at 'high street' rates are pretty good, however cannot guarantee it.

You should talk to a whole of market broker and give them full details of your circumstances and a copy of your credit file. They will then be able to look to see which of the lenders above I have mentioned would be suitable (amongst others).

Hope this helps

CheeseOnToast

Unfortunately, unless you are able to provide documentary evidence to support your argument, a lender will assume that the information is correct until it is removd/corrected by the lender who registered it.

Understood, I have a dispute logged with the credit agencies at present so hopefully it will be removed as they are fighting the case for me which is due to end in around 2 weeks at most..

This is something that could cause you problems. Some lenders will restrict the maximum loan to the price you are paying (or a % of it) and will not automatically allow extra borrowing to pay off your debts even though the house may be worth more than you are paying.

Agreed but my mum is going to simply 'sell' the house to me for e.g. 90K so she will get given the rest over 75.5 - so it should all go through as normal if I'm not mistaken?

You will need to ALL your debts and let the lender know which ones you plan to settle. That way, once the lender has matched the information you give them to what they can see on your file, they will ignore the debts you have told them will be repaid.

Yeah I've only got the 1 loan and ap 1K on c/c. The rest are in parents names, car + 1 loan etc so again not worried about that I think...

Maybe when I am ready you will be interested in acting as my broker on this? I'm sure we can sort something out, thanks for taking the time to reply, speak soon.

CheeseOnToast

Hi all,

This is open to any broker really but in particular I am responding to HelpWhereIcan -

A point I made earlier about a "Notice of Correction" was wrong, it was actually a Notice of Dispute I logged - This has now been successful (yipee!!) and the black mark has been removed from my credit file. Will I need to log the same dispute with Experian as well?

Secondly, to paint a clearer picture of my credit history, to a certain degree it has been very poor, about 2/3 years ago (closer to 3) I was missing a lot of payments across several accounts regularly, I was never defaulted or even made deliquent but there were a lot of missed payments there.. Now moving on from that I was clear for around a year until I moved a house a year ago, where I was 2 payments late on 2 accounts, apart from that again I am clear. (Note though I think at present this would leave me clear for around 10-11 months - Is it worth me waiting until a full 12 months is clear? Will that be better for a credit check?)

Would anyone care to point in me in the direction of a worthy lender? I am interested in a possible 'fee saver' mortgage preferably saving on valuation and legal fees, but only if it is really worth the extra (I.e. I don't to want pay over the odds as I can raise the fees if neccesary).

With regards to my one other issue which is the legal fees, I am going to be paying for both the selling & the buying (as this is the agreement with my mother when she got it in her name) so again anyone who can offer me any advice on fees I can avoid, or self-conveyancing would be greatly appreciated.. I am going to look into the online conveyancing referral's as well as they seem a lot cheaper, can anyone point me in the direction of a good one?

Sorry to write such a long-winded post but I'm excited now and it's moving closer!

Thanks for any assistance provided as always guys.

Phil

HelpWhereIcan

CheeseOnToast wrote:

it was actually a Notice of Dispute I logged - This has now been successful (yipee!!) and the black mark has been removed from my credit file. Will I need to log the same dispute with Experian as well?

Yes

CheeseOnToast wrote:

Secondly, to paint a clearer picture of my credit history, ... (Note though I think at present this would leave me clear for around 10-11 months - Is it worth me waiting until a full 12 months is clear? Will that be better for a credit check?)

In some respects it may be. No lender is particularly open about the way their credit scores work ('cos otherwise we'd all manipulate them), but when it comes to Insight(Equifax)/CAIS(Experian) Information about the conduct of credit accounts, the period most lenders are most concerned about is the last 12 months, although I have been told that some will reduce your score by less once that info is more than 3 months old.

CheeseOnToast wrote:

Would anyone care to point in me in the direction of a worthy lender? I am interested in a possible 'fee saver' mortgage preferably saving on valuation and legal fees, but only if it is really worth the extra (I.e. I don't to want pay over the odds as I can raise the fees if neccesary).

I would expect that you would have a fair chance with most lenders and would urge you again to speak with a broker.

However, as far as giving a GENERAL idea of which lenders may look at your situation favourably (including the need for a concessionary purchase with all deposit being paid for you), I would look at:

Halifax (their credit score does not leave a 'footprint' and they can be ok with SOME missed payments depending on the rest of the case); Yorkshire Building Society/Accord (should be ok with historic missed payments, but believe their credit score leaves a footprint); Royal Bank of Scotland (their score does not pick up a payment profile but leaves a footprint); Abbey (can be flexible with missed payments, believe their score leaves a footprint).

This is not an exhaustive list and I really would try getting some advice as there is no point in missing out on a good deal just 'cos the lender has not been mentioned by me. Believe it or not, I really do not have enough info about you to make a reccommendation and I think that time spent with a broker could save you a lot of money in getting the right deal.

As for conveyancing, you are better off shopping around and most online services are perfectly ok. Just one thing, don't forget that you and your mum will need seperate solicitors as a solicitor cannot act for both the vendor and the purchaser.

Hope this helps

CheeseOnToast

OK Thanks mate, I had a broker last time who was good, I might try him again but I think he charges a fee (which was waived if I took my insurances out with him) but they seem a bit pricey which has put me off trusting him.

has anyone got a recommendation for a South Wales broker?

HWIC - Just to clairfy, if I do the halifax credit check will I not get a search logged on my file?

HelpWhereIcan

CheeseOnToast wrote:

OK Thanks mate, I had a broker last time who was good, I might try him again but I think he charges a fee (which was waived if I took my insurances out with him) but they seem a bit pricey which has put me off trusting him.

has anyone got a recommendation for a South Wales broker?

Do not use anyone you do not trust. The best way is family/friends reccommendations, but failing that use the Yellow Pages etc to find a local and use the questions MArtin suggests to find a 'decent' one. I would also ask how often they manage to place people with previous credit problems with a prime lender.

CheeseOnToast wrote:

HWIC - Just to clairfy, if I do the halifax credit check will I not get a search logged on my file?

Yes AFAIK. If you get a Halifax decision in principle (I think they may still call them mortgage cerificates), it is not a recorded search. With the Halifax, I would make sure yor Experian file was clear as well.