Halifax & Nationwide Lending Criteria

ACG

Fair enough.

£2k does seem on the high side though but there is adverse involved so that could be why their fee is so high.

Im not sure whether halifax allow customers to do this but as advisors we can call up speak to our account managers and run scenarios by them. Theyre usually pretty good and give us an idea as to whether it will geet accepted or not. Might be worth giving them a call to try.

Thrugelmir

EHJK wrote: »

Can you elaborate? I don't see explicit mention in criteria that debt consolidation is prohibited - I will go and look again to be sure.

There'll be nothing mentioned as such in the criteria. More a question of whether a debt of this level is within the lenders current lending policy, and where it comes up to the attention of an underwriter what their view is. On the whole debt consolidation does not solve the root problem of the issue. Lenders have no need to be charitable and make life easier. When repayment of the debt focuses attention on managing budgets better. Statistically those that consolidate, are highly likely to struggle again in the future. That's human nature.

kingstreet

I suggest you obtain all three copies of your statutory credit file if you have not already done so. Information may not be visible on all three, so an application to a lender who uses one CRA in particular might improve your chances.

EHJK

Since the turn of the year I have subscriptions to Experian and Equifax to monitor credit commitments going forward. I can see everything in there is as expected albeit not desirable. I understood a few lenders use Experian for DIP but then Equifax for Offer/Application.
Waiting for April credit updates as I've closed an account and reduced CC balances.
As a general practice is it better to pay off credit card balances or clear financial commitments? For example, pay £1300 off a £14000 CC balance, or close out a loan with 8 months left to run at £180 per month?

Thrugelmir

Lenders use datasets supplied by the credit agencies as part of the calculation to create their own scores. They do not use what you consumers see.

Advice is normally to clear the debt with the highest interest rate first. The loan may well incur you an early redemption interest charge.

kingstreet

EHJK wrote: »

Since the turn of the year I have subscriptions to Experian and Equifax to monitor credit commitments

Call Credit?

Credit commitments affect affordability. As long as they do not significantly eat into your disposable income, they may not be a big problem. Lenders typically ignore a commitment with less than twelve months to run.

Lenders "tax" your income with a set percentage for credit card debt. One charges you 5% of the balance. If you want to borrow towards your maximum, reduce the balance.

EHJK

kingstreet wrote: »

Lenders "tax" your income with a set percentage for credit card debt. One charges you 5% of the balance. If you want to borrow towards your maximum, reduce the balance.

Interesting. Is the tax applied against monthly commitments, or a reduction of income. i.e. £14k (CC) * 5% = £700. So do they add £700 per month onto my monthly outgoings, or apply it against salary by multiplying up to 12 months (salary time period) thus £700 * 12 = £8,400 so "[Salary] - £8,400" is used on affordability? Not looking for exact science just want to understand.

EHJK

Okay, found the answer for one lender, it is added (5% of CC balance) to the total monthly commitments figure, not as a reduction of salary.

Mezza1979

if this helps. I have a default on my credit file for £100 from 2008 and it was the ONLY reason (as confirmed via by my independant financial advisor with the individual lenders ) that i was declined a mortgage with both halifax and my current lender , Nationwide. Don't waste your time and credit searches by going to them!

EHJK

Thanks. This is exactly why I wish Halifax published their specific criteria.
I do wonder though if the default was the biggest factor in your decline rather than the reason. You know, if a default is a heavily weighted negative factor but you counter it with a large salary/affordability factor it may be enough to get you through overall. I'm just speculating...