refused mortgage - help please!!

boo123boo

hi,

im hoping someone can help point me in the right direction.
Our current landlord has decided to sell the house we rent, and have given myself and partner first refusal. i spoke to a mortgage advisor who managed to get a decision in principal from the Halifax. I paid for a valuation/homebuyers survey. but have just found out that they will no longer give me a mortgage, due to a default on my credit score from 2008 (loan was settled in 2010). ive had a report done by experian and it says apart from the default i have an excellent credit score. as far as i know the mortgage advisor told them this in his initial enquiries. this was based on an 85% mortgage. my advisor says our only alternative now is to either leave it for at least a year which we dont really want to do as we will miss out on this house, or try and increase our deposit. is this likely to help? are there any other lenders that may be more lenient?

any help, suggestions welcome

thanks

antonic

The problem is the default and its recent.

Your credit score is about as useful as a chocolate fireguard, as every financial institution has its rules regarding lending and a credit score is just a way of trying to get money out of you for nothing.

Dave_Ham

Depending on who has the default, income and purchase price, can you apply in single names?

There are lenders more flexible than the Halifax at this loan to value, however they do come with higher interest rates so not always good advice..

Good luck

ACG

So according to your advisor, the only lender that would accept you with a default is funnily enough the one he applied to before he knew about the default, only now you have to put down a larger deposit.

I dont think that is correct. How much is the default for? What month in 2010 was it settled and who was it with?

kingstreet

Another good time to clarify the Halifax approach;-

- the Halifax system does not ask about adverse credit. The system picks up what's there, or it doesn't. You can't influence the outcome by how you answer a question which doesn't exist

- a decision in principle involves no formal check on your credit accounts, so defaults and late payments don't show up until the formal check at full application stage. I would not even bother with a Halifax DIP for an applicant with credit problems. Full application only

- at full application stage, fees can be taken, but these will be refunded by Halifax if the service you paid for hasn't been carried out. ie - you will get back a valuation fee if the inspection hasn't been done.

The brokers frequenting this site are all well clued-up on the Halifax DIP limitations. Unfortunately, many of our brethren in the big wide world aren't...

Leon_W

Kingstreet is spot on.

In the past is was quite certain that if you passed the initial AIP check, then providing the follow on information backed up what was on the AIP, Halifax would do it. In eight years I never had one declined that was accepted at AIP stage. That is no longer the case.

It appears that you can have a very good credit score with a bit of historic minor adverse which gives you a good pass at AIP. It's only when the result is checked at full application stage that the minor adverse turns up and the case is automatically kicked out however good your score.

In my opinion mortgage lending is now the tightest it has ever been, and unless you have very clean credit records then it is virtually impossible to obtain a mortgage, sometimes even at sub 60% LTV levels.

The_J

Agree with kingstreet, but I would say that the Halifax soft score does sometimes pick up bad credit if it's been registered at the current address. It's linked addresses and old addresses where it struggles, no idea why.

boo123boo

im having to apply in just my name as my partner works seasonally and does not have a regular income each month. the default was in my name. it shows as defaulted april 2008, settled october 2010. my situation was completely different then, i was struggling on my own in a low paid job and had to find money to pay my rent and bills. i have managed to turn everything around, dont owe anything now, am well paid and can easily afford my rent every month - so why cant i get a mortgage?

can anyone recommend any lenders who might be able to help, who can look at the whole picture and not take one glitch to mean im unmortgageable!

also, by increasing the deposit will this really help? i dont want to keep searching if its not going to get me anywhere as obviously this will show adversely on my credit rating

thanks

kingstreet

Every time we get a case like this, we circle back to the same fundamental question.

Why does Halifax feel its "soft footprint" is worth more than giving a potential borrower a more reliable agreement in principle?

Perhaps it works better in the direct market? It's certainly a PITA for those of us who work in the business... :mad:

kingstreet

With a higher deposit, you may then fall into the criteria of the likes of Kensington and Aldermore if the default is a few years old. TBH I haven't looked at the criteria of either of these recently, so others might have a better idea.

Although your partner may not have a regular income, his/her credit may help drag your overall score up a bit. You may be more successful with a joint application.

Smaller building societies may also take a more enlightened approach with a larger deposit available and potentially on a joint application.

Your broker should be working on this to establish the options open to you. Are you using an independent/whole market broker?

boo123boo

thank you for your reply...

i'm using an independent . he said he couldn't include my partner due to the irregularity of his wages - although he has been with the same employer for 5+ years. i don't know if its worth going direct to a building society myself, to change advisor or to see if my advisor can come up with another lender. i just dont want to go through it all again if im going to get the same disappointing answer