Sins of the past

Astonian

Hiya, my wife and I are in a similar position to many people posting on here. Our credit reports were OK - mine good, her's fair.

Raising a huge (by our standards) 10% deposit seemed like the biggest barrier to owning our own home. We have done so, found a house, got a DIP, made an offer, offer accepted, decision- turned down. This is by Natwest.

On closer inspection we believe it's because
a My wife is on a short term contract
b She has missed payments to a credit card company on her file AND payday loans from Wonga etc.

My questions are:
1) does anyone know which lenders are more sympathetic to PDLs and less than perfect credit?
2) do lenders ever change their mind on appeal?
3) my wife believes her employer to be sympathetic - she'll probably get a permanent contract in the next couple of weeks. I'm scratching around to be able to offer a 11-12% deposit instead of 10%. I do believe we will get a positive decision off someone in the coming weeks. In the meantime, how quickly should I tell the vendor about these difficulties? I want to be honest without alarming the vendor unnecessarily.
Any perspectives, gratefully received.

Thrugelmir

Lenders need to consider affordability and the risk a potential borrower poses. Commercial decisions aren't made on sympathetic grounds.

PDL's suggest that finances are stretched and there's no ability to absorb financial shocks.

Short term contract means that the income is insecure.

No lender is going to consider this a suitable basis for a 25 year mortgage which will require 300 on time monthly payments.

Do be disheartened though. Resolve the employment issues. Keep saving and building the deposit. You will get there.

ACG

Natwest were never going to offer this. They do not like PDL's so appealing is a waste of time. How recent were they?

How recent were the missed payments? What do they show? Does it show as a 1, 2, 3 or 4? (this is where the green/amber/red marks are).

With regards to the contract, how long has she worked at the company for?
How long is left on the contract?
Has it ever been renewed?

There are quite a few things here which at 90% could cause some issues, although thats not to say its impossible.

I think getting all 3 credit reports down to a god experienced broker (not an estate agents broker) might be the best thing to do.

As far as going to the estate agents and telling them the issues, give them a couple of days they will be asking when the valuation is getting booked in. Its at this point i would probably say they have asked for a copy of my P60 which i have posted off (that will buy you a few extra days/a week) whilst you get a new app under way.

Astonian

Thank you both for replying.

The PDLs were:
May 2011
Aug 2011
Sep 2011
Oct 2011
Nov 2011
Jan 2012
Feb 2012
Mar 2012
Apr 2012
Jun 2012
Jul 2012
Sep 2012

Every one of these were paid off on time and I'm sure my wife had no idea that they would count against us in the future.

There six red '8's next to a store card. This was settled in full in 14/08/2011.

Apart from that, it's clear.

What. A. Nightmare.

I'm coming to the conclusion that unless I can find a lender that isn't bothered by PDLs it might be a number of years before we can borrow.

leveller2911

Astonian wrote: »

I'm scratching around to be able to offer a 11-12% deposit instead of 10%.



Any perspectives, gratefully received.

Have you also factored in additional costs such as solicitors fees,stamp duty,moving costs etc?. Always a good idea to to have 6 months mortgage money set aside for a rainy day.

angelsmomma

I am stunned at that amount of pdl's, I did not realise some people used them as an overdraft facility, it must have cost a fortune in interest.

Thrugelmir

angelsmomma wrote: »

I am stunned at that amount of pdl's, I did not realise some people used them as an overdraft facility, it must have cost a fortune in interest.

Similar to being trapped on a hamster wheel. A reflection of the poor financial skills that many have. Which is a result of poor education, easy credit and have it now culture.

Astonian

@leveller2911 - yes, thanks.

@angelsmomma / @Thrugelmir
I dare say there was a lot of interest paid. My wife is lovely and if she had thought for one moment that these loans would jeopardise us in the long term she never would have taken them. I think she just thought that as the scenario she found herself in was one of her own creation she felt too proud to ask for my help- I would have happily paid any debts off.

We just have to look to the future. I understand that the banks have their own algorithms to determine who should/n't be lent to. I'm really keen to find out who are less likely to be put off by the PDLs so if anyone knows, please share!

angelsmomma

You need to go to an experienced broker with this. They deal with lender so know what the criteria is for each lender.

I would always use a broker (and I have an excellent credit rating), I paid my last one £299 and it was worth every penny not to have to research or deal with the lenders.

ACG

That 8 is a default, not missed payments.

Get all 3 credit reports and see a broker. At 90% this really is going to be a tough ask. 85% i would say this could be placed.

As you have an offer that has been accepted and you will have estate agents pestering the life out of you sooner rather than later i would forget trying to do this yourself and just try to find a good broker.

Astonian

Thanks angelsmomma and ACG.

I'm currently using an independent broker - he's very experienced and supportive but sounding increasingly despondent.

Through these forums I learned that banks prefer it if you supply a landline number. I rent in a shared house and have nothing to do with the landline, other than to make a contribution for internet. However, once I found out that it could make a difference , I got in touch with our broker to include the number in the app. What I'm saying is, it's our broker's profession and I trust him - but if there's anything I can learn on here to help then great.