Anyone had a mortgage approved after using a payday loan in last 12 months?

Curlyambyth

Hello

Has anyone had success with having a mortgage approved after having used a payday loan in last 12 months?

My husband took a very small (less than £100) loan with wonga 4 months ago to pay for major car repair (used savings to pay for the rest) just before payday. He paid the loan off in full once paid. He was unaware of the impact this type of loan has on mortgage applications until recently.

Does anyone have any good news / success stories for us please??

We are going to use a mortgage broker to steal us in the right direction.

Thanks

ACG

There are lenders who will ignore them - but you need to do your research or speak to a broker.

Thrugelmir

Why didn't your husband dip into your savings for the deposit on your future property purchase?

Curlyambyth

He used his savings to repair the car. We're using the equity from our house sale as a deposit as well as savings we've made since the car has been fixed

Joe_Bloggs

AGC said that:-

There are lenders who will ignore them [ payday loans] - but you need to do your research or speak to a broker.

What particular research will lead a lay person/potential borrower to discover the particular treatment of payday loans by a mortgage underwriter ?

The broker is going to have considerably more experience in directing the deal as they are in contact with underwriters on a daily basis.

There should be a warning about the ongoing treatment of payday loans with mainstream finance credit institutions if the consequences of obtaining a payday loan in the past is deleterious to future credit chances of a low interest loan in the present/future.
J_B.

ACG

Calling up the lender and asking the question or checking lenders criteria.

Your right we will have more experience, but some people do not like to use brokers and to avoid appearing biased as others have been saying recently by saying use a broker, I wanted to give an alternative.

In all honesty my suggestion would be to use a broker but if your happy to put the groundwork in yourself it can be done without a broker.

Curlyambyth

Thank you for the advice.
Our previous mortgage was with principality and we have asked the question to them and he said that if the underwritter doesn't see it on a bank statement then we should be fine.
However having researched about it I read that principality announced back in February that they won't give a mortgage if you have used a payday loan in last 12 months.

Have you any experience with principality?
I think we will be using a broker.
Thanks again

GMS

It will show ont he credit search so the bank statement not being picked up may not help.

As above, this will need thorough research or a broker.

What loan to value are you looking at?

amnblog

GMS is right.

You need a broker.

ACG

Your right, they implemented that bit of criteria earlier in the year (I will take your word for it being february).

Thrugelmir

Curlyambyth wrote: »

He used his savings to repair the car. We're using the equity from our house sale as a deposit as well as savings we've made since the car has been fixed

I made the observation as the use of a Payday loan tells a lender how fragile your finances are.