Continue with First Direct application or try another bank?

Fleeb

Hi

I just applied for a mortgage with first direct and got an AIP, they are sending me the documentation to complete and an envelope to send P60, wage slips, bank statements etc. Apparently no credit check has been done yet.

Now I've done some more research and I've found that it is really hard to get a FD mortgage. To hear the stories it seems like they are looking for any excuse NOT to lend. If they do knock me back then it could seriously delay my house purchase.

I'm wondering whether it is best to just cancel the FD application and go with another lender. I'd probably get a worse rate but with a much better chance of being accepted.

Here is my situation:

Want to borrow just under 4 * salary
75% LTV
£28k deposit (none gifted)

Debts/Credit:

Around £5k of pre-1998 student loan debt - deferred

3 x Credit cards. About £12k spending limit in total (because the banks keep upping the limit even though I've never been anywhere close to the previous one). Monthly combined balance very variable - often over £500 but always paid in full each month.

3 x current account with authorised overdrafts. About £1700 available in overdrafts if needed but never dipped into. Always have a positive balance of at least a few hundred pounds in each.

Halifax - had for years and years, just switched from.
First Direct - recently switched to for bonus, also because I knew I wanted a FD mortgage.
Santander 123 - moved most of my deposit cash here for the decent interest rate.

I'm worried First Direct might decline on affordability grounds, as the salary multiple is high. Also I have a lot of available credit in terms of credit cards and overdrafts; I don't use it but it is there. Finally they'll see some big credit card payments on my bank statements but they won't know that these are luxury items which I can simply stop buying. Finally I have one late payment 5 years 9 months ago on my credit report so it isn't 100% squeaky clean.

If any of you are familiar with First Direct's criteria/scoring methods (or have been refused by them because you shared some of the above "less than optimal" characteristics) please chime in; what do you think my chances are of getting the FD mortgage? Should I just cancel that application and apply to a different lender instead?

Any advice gratefully received.

Thrugelmir

Fleeb wrote: »

I'm worried First Direct might decline on affordability grounds, as the salary multiple is high. Also I have a lot of available credit in terms of credit cards and overdrafts; I don't use it but it is there.

Close what you don't need. Good housekeeping whatever the outcome of this application.

To hear the stories it seems like they are looking for any excuse NOT to lend.

Lenders have limited funds to advance. HSBC are conservative lenders , always have been, with a very targeted market. So while others have fallen by the wayside. They know have become one of the largest mortgage lenders in the market.

Wh05apk

As has been said FD are very picky, as you have an AIP you should be ok, don't worry about your existing accounts etc, if the only adverse is nearly 6 years ago, unless for a large amount, it should be fine.