Nightmare just seen default already sent mortgage application.

liamdaley

No news as yet, hopefully no news is good news.

chocolatecat

Hi Liam

Hope it goes through ok for you. Keeping my fingers crossed for you.

pdej4

Hi Liam. Way back in 2005 I temped as an underwriter for the Halifax after finishing university. I started with AIP referrals, most of which failed the credit score check, and pretty badly due to the client (you) not letting their broker know about their pretty obvious debts or defaults. In general They were things you would never forget about. I remember having to call the brokers back to say "im sorry but the application has failed the credit score check". Inevitably they would ask why, but I couldn't tell them. The best one was someone who clearly hadn't declared the New Mercedes they were driving...something like £35000 worth of shiny new motor showing up on their file!

As Alibumblebee has been told it isn't always the end of the world to have a default on your record if everything else is in good order and you meet the particular lenders criteria. Certain banks won't even look at you if you have a single one, but I don't remember Hfax being like that.

That all being said it is possible but was rare when I was underwriting that if you passed the AIP your application got turned down at full application stage. It does happen but back in my day it was mostly due to changes in the credit file that took place between the AIP and the full app. Given you said you have already passed the AIP I would have thought you would be ok, but the rules have hanged much since 2005, when every lender and their dog gave cash out.

I now how you feel, as we're 90% of the way though our house buying process and have had to jump through an insane number of hurdles, each one slightly more stressful than that preceding it.

Good luck to both of you!

alibumblebee

That's really helpful pdej4. Do you know how far into your application they recheck your credit after an AIP? Is it one of the first things they do or can you wait weeks and its done after you have a valuation?

pdej4

I've just previewed this and it's monstrous, but I hope it helps you understand more about the process:

Ok so the AIP or Agreement In Principle, does a basic level series of checks - including credit check, and affordability, based on what you have told the bank. Things have changed a lot since 2005 when I was underwriting and things are generally tighter, if not too tight in some cases (the banks have gone from one extreme to the other), but when I was working, normally if you passed the AIP and truely had provided all of the correct information, i.e. all debts (today this seems to include student loans as well, not sure why as this is pre-tax, and providing you have based all affordability on net salary, not gross, i.e. after tax and national insurance or any other deductions have been taken away you should be ok) you should in Principle be ok. That's the point of an AIP or what some other banks call a DIP, decision in principle. In principle or in theory it is ok, and we won't waste all of your time, unless something you haven't told us comes up.

Your credit score is then normally checked when they do the full application. That is, when they hit "Apply" and the computer will say, No, or Yes providing you can send us all of these documents. The documentation they request from you will depend on how much of a percieved risk you are to the bank. If you are first time buyers you could be potentially higher risk purely because you have less track record. So, for instance higher risk will mean that you may have to send in 3 months salary slips and bank statements that show your current rental or mortgage payments on them as well as your salary going in to the account and any bills that you currently pay are going out regularly at the levels that you told the bank (if they asked you about this - Hfax didn't used to, but I don't know now, but Skipton certainly do, and it's not necessarily a bad thing to do, as it means you are forced to sit down and do all the affordability maths yourself too). Lower risk may only be asked for 1 months worth of documentation.

Essentially the underwriter will be checking a few points, including:
1 - salary is correct
2 - demonstration of good account conduct
3 - affordability of the mortgage
4 - commitments (or debts, i.e. loans, credit cards etc) are correct and payments are being made as suggested
5 - to see if there is anything unusual going on in your account

So for example on our current application that we have just recieved the offer for, my wife was recieving sick pay and we had negotiate our way round that, or actually our broker did.

Don't get too scared of these things, another example being account conduct. We, like a lot of people live to our means. We both earn well, but have very little left in the pot at the end of each month because of our lifestyle. We actually were not planning on moving home now, and had even had a conversation before my other half went into hospital to discuss it and said we'll give it another 18 months or so. Then a great house came up in the perfect area for us. We decided to move with it, but since we hadn't really been planning for it, our current accounts don't exactly look great. We're normally maxed out by the end of the month because currently our disposable income is exactly that, and we hadn't been planning on moving, so hadn't really adjusted our finances to reflect the fact that we would be spending more on the next house, rather than on ourselves etc. This hasn't been a problem as the lender can see the income is there, it just means an adjustment to our lifestyle which we are willing to make because the house is really important to us, and they can quite clearly see it is affordable.

I apologise, I've just realised how long this is, and I haven't even really answered your core question yet! I thought it would be helpful to understand more of the process. So do they, credit check after valuation? In short, no not normally. They reserve the right to re-credit check you at any point during the process, but this is normally if new information has come to light that would affect your application, or if you have for example, recieved a mortgage offer and have not been able to use it within the valid timescale they have applied for it.

If you get to the valuation stage, you have normally passed all of the credit checking and should normally have little to worry about in terms of credit check.

I don't want to scare you but try to keep as level a head as you can regarding each step of the process, always be prepared to walk away and try not to get too excited (at least that's what I've been telling myself for the last 6 weeks!).

There can be numerous hurdles when buying a house, and the biggest problem is that it isn't purely a logical situation. It's probably one of the most emotional decisions you'll make, and that's why the process pulls on your heart strings everytime something could or very nearly does go wrong. Through this process you are depending on so many other people. Make sure you get your monies worth in each case and if you have a broker ask them any questions (or your solicitor depending on the question). At the end of the day you are paying them, and they want your business to ensure they get their fee.

kingstreet

pdej4 wrote: »

Hi Liam. Way back in 2005 I temped as an underwriter for the Halifax after finishing university... the rules have hanged much since 2005, when every lender and their dog gave cash out

You're a little out of date, I'm afraid.

The Halifax Mortgage Promise system carries out only a limited search at AIP stage so it leaves only a "soft footprint" on the applicant's credit file. It does not check credit account conduct with other lenders and does not search other previous/linked addresses.

Many of the active brokers on here no longer trust the Halifax MP as the full application search can often see a previously accepted borrower declined when they believed they had been accepted.

Search for other threads like "Halifax mortgage promise declined on full application," or similar, and you'll see the number of cases.

In addition to the above, Halifax randomly audits around one in twelve cases post-offer. This involves more detailed scrutiny of pre-offer documentation, a further credit search and sometimes requests for new/further documentation. There are several recent threads on here about offers being withdrawn at/after exchange.

As you yourself have mentioned, the lending landscape has indeed changed beyond recognition in the last four years.

pdej4

kingstreet wrote: »

Many of the active brokers on here no longer trust the Halifax MP as the full application search can often see a previously accepted borrower declined when they believed they had been accepted.

I assumed there would be a little out of dated-ness in there, but hopefully it explained more about the overall process to the two posters needing the information.

Interesting though that you say that, as our broker did trust the Hfax MP, and given all the other issues I feel we have had with him, I would begin to suspect there was a larger element of just wanting to make some fast money there. If I'd have known that I would have asked him to get a proper AIP from elsewhere to be more certain of the situation. Surely you have to beg the question what's the point of the Hfax MP then? Apart from the soft footprint, or is that all it is about?

kingstreet

The bulk of your long post is fine. You're just a little out of date with Halifax procedure since it became part of LBG.

Very good question about the point of a Halifax MP. Most of us ask ourselves the same question. I think it's fair to say Halifax rates aren't great these days, so they tend to be used where underwriting flexibility is required - income stretch, other forms of income acceptable etc.

I use them for an MP only when I have all three credit files in front of me for a particular borrower and I know I can rely on the result because I've taken the trouble to fully research my client. Otherwise, the MP is a sales gimmick the Halifax use to "placebo" the new generation of credit agency-aware type borrowers who think a soft search is the be all and end all.

kingstreet

Here's one of the passed AIP/failed full app threads;-

https://forums.moneysavingexpert.com/discussion/3807283

it pretty much sums up what happens.

liamdaley

Spoke to broker and property is going to be valued this week, and i've passed their checks subject to one or two extra documents being supplied so fingers crossed.