Updated: Now a question about deposits and valuations :)

MarkNewby

Hey all,

We're at a bit of a loss and are wondering if anyone out there could give us a bit of a hand understanding what's going on with our mortgage application.

I [Mark] have a few defaults on my credit file, and after asking an IFA, my partner Matt applied for a mortgage on his own. He has no credit problems on his file, has one credit card which he pays the balance of without fail every month and has done for the past year [since he got it].

We applied through the mortgage through one of the property developers two options of broker (as we are buying through their shared equity scheme) and they found Matt a mortgage with Halifax. He got a credit-checked agreement in principle and gave the broker all the documents they needed [his wage slips / statements]. Everything seemed to be moving along.

The broker submitted the documents last thursday for the application after she forgot to ask for 3 bank statements from the account his salary is paid into. Because this delayed things the sales negotiator at the development rang the broker today to see where things were up to. She was told that the mortgage had been underwritten, and that they were just waiting for the bank to arrange a valuation.

Then, a few hours later, Matt got an email from the broker telling him halifax had asked her to get Matt to obtain an experian credit report for her to look at, and she also asked if he had any adverse credit / missed payments that 'may explain what the problem is'.

As I explained, Matt has a really good credit score. He has been on checkmyfile and 2 agencies report him in the upper 700's, but experian say he isn't matched on the electoral register [he has been for a year now at this address] and rate him around 350.

Matt told the broker that he'd always paid on time and had no credit problems, and sent the broker PDF's from checkmyfile including the experian report. The broker replied asking for an experian credit report [highlighting their 30 day trial as a free way to get one] and then mentioned 'but looking through the checkmyfile reports I [Mark] was shown as a financial link [due to our shared bill paying current account with no overdraft agreed / available] - does Mark have any adverse credit that could explain what the problem is?' I of course do, but Matt had applied without me for that very reason.

So... in summary:
- Is this financial link going to mean that Matt, even though the only named person on the mortgage, won't be approved?

- If so, would calling up and closing the shared account have any effect on this, and if so, how quickly would it take effect

- Could the financial link be a red herring and the bank have flagged it up only because he isn't shown on the electoral register on their report

- Or is everything okay and this is just part of some fraud check?

Cheers guys & sorry for the essay, just seriously worried as we've given our landlord a months notice [runs out at the end of the month] and he's found someone to move in, and we've spent a lot on furniture already thinking that there would be no problem.

MarkNewby

*nudge* Sorry to be a pain

funkyspuke

350 is a very very low credit score ... in fact it's the lowest credit score that you can get.

This is difficult to understand considering that Matt has had a credit card for over a year and not missed a payment. To be honest a year of clean credit, no missed payments etc should get you a 900 credit rating to be honest.

It's odd that the Halifax have asked you to supply a credit report! It's confidential to you is your credit report and I would not advise sending it out to be honest.

More investigation is need as to why experian have given Matt a 350 credit score?!?!

danielanthony

More likely due to him not being on the electoral register AND the fact you are financially associated through having a joint account. It is recommended that you have no joint accounts as the bad credit of one holder can affect the good credit rating of the other. So even if your partner with the good rating applied, his score would not be as good as it would be without your association.

himitsunomogura

First off, are these scores you are talking about genuine ones from those companies? Because checkmyfile scores arent worth a jot, they are barely based on any real information and are rarely the same as the ones through CRAs...

If there are no late payments, ccjs, or defaults, the low score is almost certainly due to one of the following: high outstanding balances (total over 10k, not including mortgages mind), maxing out credit cards (over 75% of limit), or lots of recent applications (more than 3 in 3 months really really hurts you).

Regardless of your score, if you have a financial link, the lender will check that person as well, even if it isnt a joint application. This is because if you are linked, it would mean that if they got in trouble you are going to be impacted and that could affect your ability to repay your mortgage.
If you aren't on the electoral register, it doesnt really affect your Experian score much, but it can really hurt your chances of getting credit as the lender can't properly verify your identity.

350 isnt the lowest score by the way...it is possible to have a 0 score with Experian.

patchwork_cat

Why on earth would the Halifax ask your partner to send them a copy of his credit report? I suggest giving the Halifax a ring.

patchwork_cat

Yes, but the HAlifax would do there own report, surely?

MarkNewby

Hi all - first of all thank you for all your responses and apologies for not replying sooner - it's been a hectic weekend here!

We had an email back from our broker on Friday morning telling us that the halifax had told her they would only be able to continue with our case if we were able to put up a £10,000 deposit. We are buying on a shared ownership scheme; the developer puts 25% up, and up to now we had been told that we would need a £5885 deposit as Matt's earnings alone were this amount shy of the 75% value.

After much scrambling and rebudgeting we were able to find the extra money [just!] and told the mortgage broker that we can proceed. We're now waiting for a valuation to take place, and this raises the next 'interesting question' in this all

Along with the £10,000 deposit message, our broker told us that the £10k amount needed may -decrease- if the property valuation comes back as being less than expected. We've never bought before, so are new to this, but I personally would have thought that if the valuation was less than the assumed value, we would have to pay more as the security / ltv wouldn't be as high?

I'm confuzzled!!

Mark.