Mortgage and Payday loans

jfl123

Hello,

Next year i am hopefully going to buy my first house. I wondered if anyone could tell me the extent of damage payday loans on my credit report will have. These are nearly all paid off and no new ones have been opened in a couple of months. I also wondered how long they will affect my chances for, i read on another thread that some lenders will decline you for a mortgage if you've had one in the past year. Does anyone know how true this is?

Many thanks
J

ACG

Most lenders say none within 12 months.

jfl123

Thanks, thats more positive than i was expecting! Does that mean none opened in the last 12 months or does it mean no active ones? ie ones that are still being paid off

haras_nosirrah

Assuming you have a deposit why not use that to clear the loans which will be financially crippling and then save for one year to rebuild the deposit

amnblog

If you are not paying these off short term it would be worrying in terms of your overall position.


If you have funds for deposit why do you still have PDL's on the go?

jfl123

I will be coming into some money in the new year which will be enough for a deposit and by which time all payday loans will have been paid.

Mortgage_Mark_2

The majority will say no to any within 12 months, Halifax don't, they say it's based on credit score, although the fact that they weren't paid off straight away may be an issue.

Definitely one for a broker, and be armed with your credit reports, at the time that you start looking.

JimmyTheWig

jfl123 wrote: »

These are nearly all paid off and no new ones have been opened in a couple of months.

On the face of it this sounds quite positive.
But what you are actually saying is that you have payday loans that you've rolled over for a few months?

Coupled with a gifted deposit this might mean problems. Others on here will be in a better place to confirm this than I am.

In any case, I'd suggest get the payday loans paid off as quickly as possible and try and sort your finances so that you don't need them in the future. Whether that's then enough to get you the mortgage you need next year or not I don't know, but it can only help whatever you end up doing.

Thrugelmir

jfl123 wrote: »

I will be coming into some money in the new year which will be enough for a deposit and by which time all payday loans will have been paid.

You will be asking a lender to advance you thousands of pounds over many years. As yet there'll be nothing to suggest that you can manage your personal finances well. This should be your focus initially.

jimjames

jfl123 wrote: »

I will be coming into some money in the new year which will be enough for a deposit and by which time all payday loans will have been paid.

If you are in the situation of needing payday loans then the deposit may be sorted but you may still need to address your income vs spending as you could otherwise end up in the same situation or having spent your deposit on day to day living.