Mortgage Credit Check....

kconnor

Hi folks,

Hope someone can help/advise! I am in the process of applying for a mortgage. I get my credit report monthly and have been given 4 out of 5 stars for the last couple of years. However today I received an email alert asking me to login and check my account.

On logging in, I saw they have reduced it to just 2 stars. After investigation I found out it was because I went on a comparison site for my car insurance (which, by the way, I ALWAYS pay off in one go anyway!!) and from this, 8 different companies have carried out searches on my account thus reducing my rating.

My question is - will this affect my credit check from a mortgage company? And if so, is there anything I can do as it seems entirely unfair I could be denied a mortgage because some company carries out a general check on me. I didn't realise they did unless you were applying for credit.

Thanks all.

ACG

Dont worry, if it fails a credit check just appeal the decision. If generally speaking your credit history is fine then you wont have a problem.

Also ignore the scores credit agenices give you, lenders have their own methods of scoring your app.

kconnor

What a relief it was to read that - thank you. Fingers crossed.

I've never defaulted or made a late payment etc so I'm hoping things will be OK.

I'm worried as this is a second mortgage and I feel as though lenders may be extremely strict. I have a 20% deposit which I hope is enough to keep them happy!

ACG

If your credit history (not score) is fine, your income supports the mortgage then i wouldnt worry.

20% is a decent deposit. From 15% onwards it starts to get easier to get a mortgage and they become less and less strict with their criteria. If it helps, with a 20% deposit, there are lenders who would accept you with defaults and/or CCJs - it wouldnt be the best rate (infact it would be quite high) but it would be possible - so you shouldnt have too many problems.

Simon_gloster

kconnor wrote: »

What a relief it was to read that - thank you. Fingers crossed.

I've never defaulted or made a late payment etc so I'm hoping things will be OK.

I'm worried as this is a second mortgage and I feel as though lenders may be extremely strict. I have a 20% deposit which I hope is enough to keep them happy!

Do you mean its the 2nd time you'll have a mortgage or your looking to get a second home loan in addition to your main residence?

If its the latter, typically 25% deposit is needed. Others will confirm if 20% on a 2nd home is ok.

ACG

Good question Simon. I read it as a remortgage or moving home...rather than a second home.

If its a second home then you can get away with a 20% deposit.

kconnor

It is a second property. I spoke to my broker and informed her I wish to rent out my existing property short term and sell it later and apparently I can get an agreement in place from my current lender on that?

My broker seemed to think she could get me a mortgage for the new house (a residential mortgage) with a 20% deposit.

I'm presuming this sounds right?!

Simon_gloster

If the one your buying is going to be a main residence, then its not a 2nd mortgage just a bog standard house purchase.

Your existing mortgage will either need letting consent if planning to let it or it will be taken into account for affordability.

Senior_Paper_Monitor

I agree with ACG (and others) fully that the credit agency score is irrelevent - a lender's 'score' is unlikely to impact anywhere near as heavily as a result of insurance searches.

It is also possible that the OP is seeing his 'soft footprints' which third party lenders will not see.

BUT, this should be a salutory warning for readers that 'browsing' the internet (including the new owners of this site !!) and making general enquiries can be damaging for credit scores - do not enter your personal details unless you intend to buy or want a contact (does the OP realise how much his snail mail, junk email and unsolicited phonecalls are going to increase in the coming months - this is probably his biggest real problem ?)

kconnor

Can I also ask another question regarding the deposit for my mortgage. It is a gift from parents, but they are funding part of it from a loan in their name which they will be paying back.

Will this cause problems do you think?

I'm having issues getting the full deposit myself as my husband has bad credit so will not be on the mortgage and my understanding is I therefore cannot use any savings that are joint but in his account??

Thanks all!

Senior_Paper_Monitor

That should be no problem (your lender pretty loses interest in the parents once the money is gifted).

I hope you are using a lender who will let you 'separate' from husband (many won't) - you have correctly the potential issue in using joint funds.