Halifax Mortgage Promise

wroenaldinho

Hi All

Me and my partner are looking to buy our first home and applied for a mortgage promise online through the Halifax website on Monday and finally heard back yesterday in regards to this.

Halifax advised we have fallen into category B of their criteria but couldn't go into much detail as to why it was that category or even how many categories there are.

We applied for £108,000 as the price of the property we were looking at buying was £120,000. We have £12,000 deposit so the most we were willing to put down was a 10% deposit.

In our application we put down the details of our finances including our salaries of £23,500 and £21,000. The mortgage calculator estimated an offer of a lot more than what we asked for but we weren't greedy and just needed the £108,000.

Anyway the long and short of it is they couldn't offer us a 5 or 10% mortgage and they said the best they could do is offer a 15% mortgage, which obviously meant we required a deposit of £18,000.

The adviser stated it could be down to our current credit utilization and as we were quite young this could affect the outcome.

Upon checking my file i have a default for £55 for a mobile payment dispute which stems back to 5 years and 7 months ago so will shortly fall off. Other than this to present i have no late payments or defaults.

I have 2 credit cards - Barclays £3500 limit of which it only has £690 on it and is in a promotional period. I also have a lloyds credit card which has a limit of £1750 and currently has £0 balance as its barely used.

My Gf has near enough the same across her 2 credit cards. one with a £1000 on it from a £3500 limit and one with £0 balance on it which has a £500 limit.

What would be the best thing to do as the only thing i can think of is it must be the unused credit across the cards as we are not utilizing them.

Would it be better to cancel these cards and just keep the barclays? Would this then free up some credit?

I'm confident of getting a 10% mortgage as i can't see what else is stopping us from doing so and once I've looked into this further i will reapply in the next 2 months or so.

Thanks in advance.

Mortgage_Mark_2

There is no point in reapplying until that default has dropped off your credit file, as without significant changes to your credit file, Halifax will not have any different an outcome for the next six months. The default dropping off your file in c.5 months will be a big change.

Speak to your broker as there could be other lenders who would consider with a 10% deposit, however Halifax would not change their mind in two months.

wroenaldinho

Thanks Mark.

Even though its a settled default and is almost 6 years old is it not worthwhile as she never mentioned it and just mentioned credit utilization.

Should i cancel the unused credit card? will this help?

Thanks

stator

Yes close down a few credit cards and/or reduce the limits on the ones you have. Also try to pay them off
After the updates make it to your credit record you could try again, but as said above you might as well wait for the default to fall off too

Dave_Ham

Have a chat with a broker or do some serious research.

Halifax are one of a few lenders that have tightened their scoring at 90% + loan to values.

Would fancy this can be sorted now if you are serious to move

Good luck

amnblog

Dave is right. You are causing yourself problems by attempting to go direct. Use a mortgage broker with experience of poor credit.

wroenaldinho

Thanks all.

Think i will cancel my unused lloyds cc to free up some credit.

I think i should have tried through my own bank first (nationwide) rather than halifax. I'll contact a local broker and see what can be done.

Thanks again

Dave_Ham

It is a bit crazy just to do this on guess work ie your own bank. Nationwide are a reasonable lender, but have some things they do/do not like different to other lenders

Genuinely speak with a broker.

Cancelling your card will have virtually no affect with 99% of lenders

Good luck