2nd Time buyer confusion!

its_smee

Hi, I am a 2nd time buyer, but sold me previous property 5 years ago and have been in rented accomodation since. I have received an AIP from Halifax (£87,210), but have now read horror stories of their "soft footprint" AIPs! Bit of background, I earn £22,000 plus an annual 10% bonus, have a loan repayment £300 per month and credit card balance circa £800, which I usually pay off in full but have been taking advantage of a 0% interest rate. I have put in an offer on a property of 87,000 and have 15% deposit. However I defaulted on a loan of 5000 in September 06 and a phone bill December 06. I believe that these won't have shown up on the AIP, am I going to get knocked back now?

Dave_Ham

Hi there,

Unfortunately it is very hard to tell until the application is submitted.

Remain positive on the basis that obviously the many people who get an AIP, progressed to full application successfully very rarely come onto a forum like this to vent and look for advice - as they have got what they wanted.

The affordability of the mortgage will not change hugely based upon this, so it is only a credit scoring issue.

No definitive answer I can give though I am afraid, it is in a small minority of cases the issue rears its head...

Good luck

its_smee

Thanks for your reply, I think I'm worrying myself unduely over it to be honest, like you say until I make the application who knows. I have been honest with Halifax and told them about the defaults, (both of which were paid off within weeks of being registered), and in a worst case senario I suppose its only 9 months to wait.

Dave_Ham

I agree, although hopefully you will be fine.

kingstreet

As Dave said, all you can do is keep your fingers crossed.

With the income you have disclosed and the 15% deposit, you can only hope you score sufficiently highly that the negatives of the defaults don't reduce your score to a decline.

You face a quandary really. You want an AIP but know the Halifax soft footprint won't really give you the confidence you crave. Perhaps they should start offering two options;-

- soft footprint for affordability idea or
- full credit check and score for affordability and certainty.

I'd certainly favour that, provided the applicant was aware of the difference. Let's face it, very few lenders offer the soft footprint option and have much more reliable AIPs as a consequence.

its_smee

I'd definitely agree with the above suggestion, I have no issue with them marking my credit record if it meant that I would have a certainty rather than a fingers crossed, where now I will have to pay out the valuation fee etc hoping that I will pass and risk loosing this if not

kingstreet

The Halifax system won't allow fees to be collected if you don't pass the credit score. Worst case scenario, it takes the card details but never uses them. I've never had a client's fee taken when a case was declined.

Going back to the AIP issue, in a way a Halifax AIP is their way of saying "yes, we'll give you a mortgage of £x, if you pass the credit score" and to me, that defeats the object of the AIP in the first place...

its_smee

That's strange as I've been told to pay the valuation fee by halifax, does this mean I'm barking up the wrong tree and I have actually passed the credit rating, or that they won't process the valuation fee until all goes through ok?

Sorry for all the questions!

Dave_Ham

As Kings said they wont take the fee, although if chasing would suggest you are ok...

Do not worry you will not pay for the valuation and then be declined for credit score - never

its_smee

Thanks guys

its_smee

So many questions sorry in advance! Application submitted friday, given an "A" pass, submitted copies of my wage slips Saturday, does this mean that they have seen my credit report and are happy with it? I'm worried about the default sneaking up on us and loosing the application for us, I understand the defaults were my fault entirely, lost my job and prioritised paying my mortgage over my loan/phone bill, just hope that with all the hard work I've put into my building my credit profile I'm now getting somewhere.

Also I am making the application as a sole applicant as husband is in a DMP, he earns more than double what I do but I've had to declare him as a dependant due to him not being on the application. Fine no problem with that, but the deposit for the house is coming from his savings, do I need to declare this as a gift? The guy I spoke to at Halifax wasn't sure and was looking into it for me, husband is happy to sign to say it is a gift and he will have no interest in the property, but does he really I need to?