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

Curlyambyth

Thank you for your replies everyone.
We're looking at 90 Ltv , we can't find any trace of the loan on his equifax or experian report but it is on call credit.

Thanks again

jacobtheamish

Yes not sure about the big two but Call Credit (noddle) have a specific section on credit reports for short term loans.

It has been my experience that most auto/credit scoring lenders will throw out loan apps from clients with payday loan history. A broker would be your best option as they can highlight manual/non credit scoring lenders.

Good luck

oli_ro

Am I on the only one here that is amazed how unfair are the criteria for mortgages used by the big banks with almost full access to the applicant's financial history ?

Using a black-white approach to this kind of activity is very cruel, I understand that this how things works because there is no human element, but things should be kept in perspective, no ?

100GBP from Wonga is a not a reliable indicator of someone defaulting, is it ? Maybe it is done on impulse, or thinking its most seamless way to borrow, rather than ask a mate/relative/etc.

Just wondering, how soon will the bank given access to the medical records and will check if you are any risk at become ill in the next 25 years and not be able to work and repay the loan back.

BTW, not defending at all pay day lenders, which I think should be banned. (different story)

kingstreet

One or two lenders see recent payday loan activity as indicating pressure on the borrower. If you didn't feel such pressure, why take such high rates on credit, when there are other alternatives such as an overdraft or credit card which can be much cheaper over the shorter term?

Many lenders are left who do not take this view, so there should be plenty of lenders open to someone whose PDL activity is not indicative of financial stress visible in other ways, such as unpaids on bank statements etc.

amnblog

oli_ro wrote: »

100GBP from Wonga is a not a reliable indicator of someone defaulting, is it ?

Mainstream lenders would expect a potential mortgage borrower to be able to lay their hands on £100 without bothering Wonga.

Either having the funds spare in a current account, in a deposit account, or available on a credit card.

There is another prospective borrower queuing up for the same money who has not demonstrated a lack of £100 ready funds.

Thrugelmir

oli_ro wrote: »

Am I on the only one here that is amazed how unfair are the criteria for mortgages used by the big banks with almost full access to the applicant's financial history ?

Nothing unfair at all. Lending policy is set to screen applications at the outset. There is only a finite of money to advance. So depending upon the target market of the lender. The bar will be raised accordingly along with the interest rate set for the particular product.

Everyone starts with an ok credit file. So most damage done is self inflicted. Use of credit is a UK addiction unfortunately.

Talc1234

oli_ro wrote: »

100GBP from Wonga is a not a reliable indicator of someone defaulting, is it ? Maybe it is done on impulse, or thinking its most seamless way to borrow, rather than ask a mate/relative/etc.

It shows that you have no savings

It shows that you have no access to cheaper credit

It shows that you are so desperate as to be prepared to borrow money at a shocking 5000% APR

It suggests that your finances might be so precarious that a single out of the ordinary expense may cause you to default on your mortgage.

Obviously people's circumstances change and with time future lenders will be more likely to overlook your past excesses.