Settled PDL's will this affect mortgage?

Smith1505

Hi All, here is my situation:

Currently have a mortgage on a property but looking to sell to be able to buy with my partner.

I have a deposit of £25k and no debt and my partner has a deposit of £40k and hope to buy a property with 20-25% deposit.

Combined income of £58k

The issue I am worried about is last year I used 2 payday loans and was not aware of the consequences. I paid them off in full and are now over 12 months settled. Will this affect my chances?

Thanks so much

Teaandtoast0124

No. I have just applied for a mortgage and i had over 24 payday loans. All paid off on time. Havent had one for 3 years though. But lenders dont like them if there under a year old. You should be fine. There is a couple of lenders that decline if they see a payday loan on file. But speak to a mortgage broker, he will no what lender to go to.

Smith1505

Thanks for your help - fingers crossed the lenders will look at the other positives rather than my stupidity a year or so ago!

dunstonh

Lenders do not like payday loans. They are indication of problems in finances. However, it is not an automatic decline. They are a negative to your overall scenario. Your situation will have a number of positives and negatives.

The more recent the payday loan, the larger the impact.

Thrugelmir

Smith1505 wrote: »

Thanks for your help - fingers crossed the lenders will look at the other positives rather than my stupidity a year or so ago!

There'll look at your credit record to see why PDL's were necessary. As people with average credit records have access to far cheaper lines of credit of one kind or another.

Smith1505

Oh I see. Well previously I had £10k worth of debt and I ended up having to use the loan. I have never had any defaults or late payments. However, I have now fully cleared all debt and am worried these two PDLs will stop me getting a mortgage