Effect of 1x recent late payment?

davei_2

Hello all

Long time lurker, first time poster as they say. :-)

I am hoping to purchase a new build home from the developer - phase 3 of a large estate, I've been told house will be ready Nov15-Jan16 ball park.

Some bullet-point details about me and this application up front:

House price :£192,950
Deposit: 15%
Loan: £164,000 + change
HTB - No trying to avoid
Sole application (wife has bad credit including last 12 months)
Salary - £42.5k
1 child
FTB
2 credit cards, both paid off at £0
Only debt is an HP agreement for car which expires next March - kept up to date religiously.
Experian score 952/999

I was recommended an 'independent' financial advisor by the developer so I rang him for some free advice and so far so good. He went through my details and tapped away on his computer and came back saying I could get a decent enough mortgage from Halifax - 3.06%, £699 per month. He said I would meet the affordability checks with them too.

I was on top of everything, debt cleared, overdraft cleared, £20k savings for deposit, financial advice looking good, meeting the affordability checks according to the FA. Then this week a late-payment marker appeared on my file for one of my credit cards. School-boy error, I had paid the card off in it's entirety, cancelled the standing order and then <£30 interest appeared the next month and I didn't see it as I thought it was all finished with. As soon as I found out, which was 4 weeks after the payment was due, I paid it of course and paid the late payment charge with it. Card now back at £0.00.

The financial advisor tells me this is a big deal and could really scupper an application with a decent lender. His first reaction was to look at Kensington (!!) to see if they would give me a mortgage which they would but obviously at much higher interest\payments (£850 a month).

My question to the experts here is, given the new rules that came into force recently, extra checks etc. Is this single 1-month late payment going to have a profound effect on an application with a decent lender? I appreciate that if I were able to sit in front of a human at the bank\lender, show the statements it would be very obvious what happened that month and why the payment was missed, although I appreciate it does demonstrate that I wasn't on top of my finances that month. No excuse really, I suppose just silly human error.

As an aside, I have of course complained to MBNA about the credit file marking. I don't mind paying a fee or charge for being late, no problem - it was late. But to so aggressively go straight to the credit file after barely 4 weeks, given the obvious situation looking at the statements between the two months, does seem a little harsh. MBNA were very unsympathetic on the phone and said they wouldn't do anything, so I have sent a complaint through their formal complaint process but that has only just gone in yesterday\today and realistically i'm not expecting anything to change. The payment was late, to be fair.

So do you think this will seriously affect a mortgage application, given how recent this late payment was, or do you think that in context (ie. I was obviously paying off my card!) it will not be such a big deal?

Sorry for the essay and thanks.

Dave

Mortgage_Mark_2

I'm amazed the first reaction was Kensington!

One isolated late payment for c.£30 is probably not likely to have a huge impact, assuming everything else is all ok, I wouldn't think?

Either way - ask your broker to re-DIP you with Halifax. Their score is a 'soft' score so even if it comes back as a decline, it'll make no difference, and you'll know instantly whether it's a yes or a no.

EDIT: Also, Kensington minimum deposit at present is 20%...

kingstreet

Halifax is max 80% unless builder/broker are on the newbuild panel.

Westminster

I was under the impression that lenders didn't like to see sole applications from married couples?

amnblog

That depends on the Lender.

davei_2

Yes me too. My Experian score seems reasonable? I know that doesn't necessarily mean anything but as a loose indication...


A late payment on a British Gas bill 12 months ago (although as gas and electric together, it appears twice). They grossly underestimated my monthly amounts, so I was paying way under the odds for the leaky house I lived in. Then one month they realised, put my combined bill up from c.£100 to £240 per month and, fair cop, I struggled that month. So we adjusted our outgoings and not missed a beat since then. An inefficient old 3-story house!


I have no other debt than the car HP agreement. I have 10k of credit card available across two cards MBNA and Barclaycard. £2k overdraft I don't use. No childcare as wife pays it. No pensions, other salary sacrifice so other than tax\ni my payslip is clean. No regular payments other than utilities and the aforementioned car. I am saving between £400-500 a month into savings account. I'm paying 750 rent per month and have done for years (obviously visible on bank statements).


How far back do they tend to look\care about these days?

davei_2

I spoke to Barclays who I bank with - cold called them, ran through the brief basic details on the phone - loan, deposit, salary, sole application, he said I fit their profile at 3.8% x salary. I told him about late payment, he said I would get referred to branch as you might expect. He asked my Experian score, when I said 952 he scoffed and said they start giving mortgages at scores of 700 odd, so with a score of 952 he doesn't think there will be a problem. Of course, easy for him to say sat in a comfy chair on the end of a phone, and of course no checks done soft or otherwise.

davei_2

Re Kensington. I am questioning the independence of this advisor. When I mentioned the late payment he was pretty quick to get to Kensington, asked if we could do joint application with my wife, I explained she had pretty bad credit record (we are waiting on Experian file to start tackling that), he asked if I could get more deposit, and is being fairly insistent in seeing my wife's Experian report.


My gut feeling over the last 24 hrs since this issue arose is that his first priority could be to cover the backside of the developer. If he can at least get me a deal at this Kensington place, then he can report to the developer that I will be able to get a mortgage albeit a rubbish one. Take the pain for a year or two then remortgage he said.


I'm talking myself into getting some advice from another IFA clearly. One who's card I didn't get from the developer........ I know not to use Solicitors from the developers, but I figured the financial advice would be alright as ultimately it is the lender that decides.

Malmo

davei wrote: »

He asked my Experian score, when I said 952 he scoffed and said they start giving mortgages at scores of 700 odd, so with a score of 952 he doesn't think there will be a problem.

I think the "adviser" is a bit of a numpty if that's what he thinks. The Experian score wouldn't be visible or used by Barclays. Take this statement with a large mound of salt.

davei_2

I fear these late payment markers (2 for the same bill, over 12 months old when I apply, and 1 in march this year), makes me a borderline case at best.

This business of getting referred to a branch advisor - would it be a positive thing to be referred to branch so that I can show statements, explain the situation, demonstrate it was not due to financial difficulty\stress? Does that make any difference whatsoever? Or is it still simply a case of 'computer says no'? Are the local branch people just paper pushers, or do they have any say in the process?

Malmo

My personal view is that you should be speaking to a decent, experienced whole of market mortgage broker (not an IFA - different remit & role).