How likely that full application will be successful?

kwhybro

Hi all,

I'm in a stressful position & would love some realistic answers on this!

We've been renting for 4.5 years & have just been given notice on our house but we want to buy it. We didn't get much warning so haven't really been able to get ourselves to the best position.

My husband & I are both self-employed. Both have two years (very low) accounts & a good year for 2014-15 of joint income £48,500.

We're waiting until the end of the tax year so we can submit the best salaries we have & have been told that Halifax will base it on one year rather than 3 years averaged. We've got an API from Halifax but after reading threads on here, I can see that it doesn't mean much!

I'm concerned because (annoyingly) I took out car finance in January & have outstanding credit cards. I have no adverse credit/missed payments etc. but a high debt level of £39k.

We have £41,200 deposit & the house is £250k so loan would be £208,200.

I've run three credit reports - all of which tell me I have poor & fair credit rating because of amount of credit. I'm now convinced that Halifax will fail our application based on this.

Any ideas, tips, guidance would be VERY much appreciated! TIA!

kingstreet

Halifax takes an average of the last two years' SA302 net profits. It only takes latest year if latest year is lower than year before, not higher.

It may be sensible to run (or have a broker run) Halifax affordability based on your circumstances so you can see if the amount you wish to borrow is considered affordable.

Landofwood

I thought Halifax need 3 years SA302's, but it has been a while since I reviewed their lending criteria.

kwhybro

Halifax have already confirmed they will take into account the last year as best salary & base lending on that. They've said we can borrow £208k which is fine because we can raise the extra deposit from family helping us out.

My concern really is my credit score.

kingstreet

Are you going to claim you only have one year's figures and hope that is sufficient?

If you provide two years, they will average them. They stopped working off latest year's only a couple of years ago according to our BDM.

kwhybro

We both have three years SA302s but it's only the latest one that's high enough. They have already seen the figures & will consider it but I'm not convinced about my credit score because of outstanding debts.

kingstreet

Landofwood wrote: »

I thought Halifax need 3 years SA302's, but it has been a while since I reviewed their lending criteria.

Happy with two, will sometimes accept just one.

kwhybro

But do their AIPs stand up?

andyfromotley

I suspect your current debt may well be a problem. Its a lot, and your best salary isn't massive. I saw a calculation of how they work out debt and how it affects your affordability. It was quite punitive, much more than just min payments deducted.

Perhaps someone who knows it will post it here? I hope for you that i'm wrong but as you already suspect it may well cause you difficulty.

kwhybro

Thanks Andy.

I'm confused as to whether they have already looked at that tho as it was all on the initial application from which they decide an AIP.