Mortgage Refused - Computer Says No!

gowen

Hi,

My wife and I are currently looking to move home and upsize. I currently have a mortgage with Halifax who I have banked with for over 15 years (current mortgage in my name only). So we went to apply for a new mortgage and were rejected. The mortgage advisor stated that the only thing she could see which would cause it to reject was a couple of late payments on a phone bill (one dating back to 2013).

So having checked my credit file through Noddle, the only late payments on my file are 2 on my mobile phone bill. I have 3 credit cards and a couple of items purchased on finance which I have never missed a payment on. So it made me wonder are those late payments on my phonebill really causing this rejection?

One of my credit cards is near it's limit (balance transferred to a 0% card) but the others have some credit available which I am not utilising.

I then arranged a meeting with a Mortgage Broker who stated that he doubts the phone bills are causing this and it's more likely to be the number of searches on my file recently. I have carried out a few 'soft' searches when looking at credit cards over the last few months and also compared a few insurance quotes for car and building insurance. I had no idea that comparing quotes online leaves a search on your file...as reading this site, a soft search is only seen by yourself and not lenders!? My mortgage broker has advised otherwise and Halifax are one of the strictest at looking at the number of searches on your file. Is this true?

Another thing he thinks maybe an issue is the fact I (stupidly) took out 2 small payday loans (around £200) earlier last year to see me through the month. I naively believed that as long as I paid them back on time then it wouldn't have an affect.

My circamstances have considerably changed since then and I have been promoted twice this year in my job and am now on a pretty decent salarly. My question is really whether anyone has any advice on what they think maybe causing this rejection and when/should I reapply? My parents have kindly offered to loan me enough money to clear all of my credit card debts in the hope that with no debt this will help my mortgage application...do you think this would work?

Any advice/responses would be greatly appreciated. It's frustrated to know that I am a responsible borrower and can afford the mortgage I am after quite comfortably but it's like 'computer says no!'.

Thanks in advance!:money:

Dave_Ham

Hi there,


Firstly try not to worry, from the information provided I would suspect there is a solution.


Halifax are pretty flexible and if your most recent payment is missed, this causes an issue but certainly not searches or much of what you have mentioned.


Not sure the broker you have seen has a good grasp either as much of what you have been told is inaccurate.


Get your Experian, Equifax and Call Credit (Noddle) reports to a sensible mortgage broker and I suspect this will be ok.


Just as these things are showing on Noddle, does not mean that they will be the same on Experian and/or Equifax and as most lenders use these; this could be the source of the issue.


Best of luck

ACG

Pay day loans within the last 12 months are probably a bigger issue than you think with somelenders..
I used to work for RBS credit cards (around 7 years ago) - they never did a soft credit check and I dont think many/any did. I have no idea whether that has changed or not. Also the insurance quotes are not always soft footprints, some are, some are not.

I dont think there is enough there to prevent you getting a mortgage, but it may limit your options although I suspect you should still be able to get high street/near high street rates.

gowen

Thanks for your comments guys...has eased my worry somewhat! The missed payments on my phonebill are also showing on my Equifax file. I agree, I did research quite a bit before meeting the broker and his advice seemed to contradict what I had read here etc...

So would you advise that clearing some of my current debts (2 credit cards and an overdraft) would increase my chances? I plan to clear them before the month end so that it is captured on my credit file if I decide to reapply next month.

One thing I forgot to mention in my original post...I have pretty much consistently for the last couple of years ended the month within my arranged overdraft. I have on a few occasions gone over my overdraft limit (a few £'s) but only for a day or so without realising and then transferring funds right away. None of this is shown on my file I looked at from Noddle nor Equifax. Does the fact I have pretty much lived in my arranged overdraft for the past couple of years affect my chances? Considering I may be asked to provide months of bank statements etc... As I say above once I pay off my overdraft debt I can cancel the overdraft completely and live comfortably without an overdraft.

Thanks in advance again for any advice. :money:

gowen

P.s. my current mortgage broker has advised I try with Nationwide. Note I haven't yet told him my plans to clear my debts first...so this may change his viewpoint on things...or not?...

Wh05apk

I think the issue here is the payday loans not sure with Halifax, but lenders view them as a sign of inability to manage finances, possibly in conjunction with late payments, then your score could be low.


I think this is likely to be one for a broker, unless you want to keep trying lenders randomly?

kingstreet

Don't go anywhere near Nationwide;-

until you have your Experian credit file
any payday loan activity is at least twelve months old, preferably older.

I can't see Nationwide doing something Halifax won't, especially if you're a Halifax existing borrower.

Dave_Ham

See what Kingstreet says, you would never go to Nationwide on an application refused by Halifax - unless for a specific criteria based reason.


Try and get your Experian too (as many lenders use) and then let someone experienced see all the files, but do no credit searches until they have explained their thinking.


Best of luck

gowen

Thanks for the responses.

I am considering paying off the debt and then reapplying with Halifax next month. The house I would like won't be on the market for much longer. I think the payday loan is 12 months old come April....:huh::huh:

"don't go anywhere near Nationwide until...payday loans are at least 12 months old"...sorry are you talking specifically about Nationwide here or generally don't try and get a mortgage with anyone?

Thanks,

Dave_Ham

Specifically Nationwide and a couple of others.


You really need decent advice, not opinion.


Paying down and re-applying is random and potentially naïve.


Get your Experian report and a decent broker and this head ache will probably go away.

kingstreet

I'm talking specifically about Nationwide.

They have form for passing a case at DIP, then kicking the full app when the PDL activity is spotted in UW later on.

It's one of those things that makes underwriters nervous. If you combine it with a few missed payments here and there in the last two years and being close to limit on a card or two, it's asking to be declined.

Halifax and Nationwide are the two lenders we use the most. Out of 200+ cases last year, I'd say more than 50% went to those two between them.