Skipton BS, credit check scores? Please help

callmechar

Hello

Me and my partner both work full time. We went to see Skipton yest for a chat. On the affordability side they are happy to give a mortgage (they also saw bank statements etc). It will be a 95% mortgage.

Anyway I am confused by credit scoring? Paid for Call Credit credit reports (£12 each!) and my score is 628, other half score is 620. He has 2 loans, credit cards don't use (paid off). I have one credit card don't use. Nothing else. I have my phone and cable tv on credit. My score was 5, partners 4. We have never had any problems with debts, my partners loans end are up to date. No CCJs or defaults.

From my understanding our scores are low. We are looking for houses now, but if our credit scores (simply because we have never really had any credit) are low then is there any point? I showed the Skipton the Equifax reports (statutory ones) and he seemed all ok. I know the score is just one point, but Skipton use Call Credit and our scores of 628 and 620 seem low but the scores of 5 and 4 (out of 5) seem good.

I am confused. Can someone help? With these scores is it unlikely we will get a mortgage? Thank you

GMS

Credit scores from the agencies are meaningless in general.

Each lender will have a different scoring criteria.

Until Equifax, Experian and Call Credit offer mortgages their score is a waste of £12.

95% Skipton mortgages are difficult to obtain. All you can do is wait and see what happens.

Good luck

Thrugelmir

How much does your partner owe on his loans?

callmechar

Thanks. Skipton were happy in principle to offer us a mortgage, we have a surplus each month and save over £500 a month at the moment towards the deposit.

Loans are less than £4k end in 18 months. These were on the income and expenditure I showed Skipton.

callmechar

Also they can see we can easily afford the repayments, been private renting where we are now for past 18 months (approx same payment each month mortgage is) so is affordable. I know its hard to get a 95% mortgage, but is it even worth looking really if our scores are low?

Thrugelmir

callmechar wrote: »

Thanks. Skipton were happy in principle to offer us a mortgage, we have a surplus each month and save over £500 a month at the moment towards the deposit.

Loans are less than £4k end in 18 months. These were on the income and expenditure I showed Skipton.

Sounds like you've done a thorough job with your application. Something which will remove any concerns that the underwriter may have.

Every month your loan balance decreases and savings increase. So everything is heading the right direction.

Hope all goes well.

callmechar

So is it worth searching? We save every month but the rent is so much (wasted money) we would rather just buy

Thrugelmir

callmechar wrote: »

So is it worth searching? We save every month but the rent is so much (wasted money) we would rather just buy

One of the resident board mortgage brokers will be along soon. High LTV mortgages aren't that accessible. Also come at a high rate of interest.

If you don't buy immediately. Maybe worth repaying the loan from savings, then saving the loan repayments.

catieeb06

If Skipton have given you the AIP then I would certainly start searching now. As far as I can remember- Skipton AIP's only last for 30 days- certainly from the broker side. If I am incorrect I am sure someone will kindly correct me.

Don't worry about the credit score. On my Experian I have 999 but Equifax it's down at about 400 due to 3 late payments when I was a student in 2007/8 so they're really not that reliable.

Henry_P_Chester

callmechar wrote: »

So is it worth searching? We save every month but the rent is so much (wasted money) we would rather just buy

I think youll find that the extortionate interest rate on a 95% mortage is much more wasted money than your rent is.

Pay off your loans and save up a decent deposit it will save you an absolute fortune in interest payments.

WillF_2

Henry_P_Chester wrote: »

I think youll find that the extortionate interest rate on a 95% mortage is much more wasted money than your rent is.

But is it, though? You can't really say that without finding out more about how much they're spending on rent and whether they will be able to contribue any of their current surplus to overpayments.

Let's assume that OP's rent is £800pm and they are looking for a 160k mortgage at Skipton's 6% interest rate. Interest only on the full capital is £800pm, but this will decrease every month because they are paying off the capital.

If they can overpay for the fixed period (Skipton allows 10% of the capital per year) they will significantly increase their equity and should be able to negotiate a 90% LTV or better mortgage.

Of course, this ignores the potential of significant drops in house prices and the risk of the OP being stuck in negative equity while unable to negotiate a better mortgage deal after the fixed period. Skipton's follow-on rate is pretty scary.