Mortgage Advise Needed (Pay Day Loans)

Martynw89

I am in need of some much needed mortgage advise!

My partner and myself have been planning to buy our own home for sometime and have been saving towards our deposit. Recently, we discovered we are due to have our first child which has escalated our mortgage plans.

In the past, I have used pay day loans and was reliant on them for a year. I stopped using the pay loans in May 2014. In February 2015, I used the pay day loan as a one off. I have now discovered that this can seriously harm our chances of getting a mortgage. My credit rating is fair, and Ii am trying to build my score by paying my credit card off in full each month.

What are the mortgage criteria's for banks and building societies and who would you recommend? We are saving 5%deposit towards a £120,000 to £180,000 (if possible) house.

I am starting to worry about the situation I have put us in and i looking to correct any errors I have made. Your advise is greatly appreciated!

Martynw89

Please note: I have never missed a payment on the loans and have never failed to make any direct debit payments.

ACG

You stopped using PDLs in Feb, not March 2014.

There will be lenders who are likely to do it, but your options are going to be reduced. It could be worth finding a broker.

binerds81

I would use a broker to help you and make sure you specifically get them to check about pay day loans with whichever lender they submit the application to. I had a mortgage application that was a yes at aip and then rejected as they saw a payday loan from 2010 on my account and said they had changed their criteria and would not lend to anyone who had ever had a payday loan! But other lenders are ok with it

chaz2483

binerds81 wrote: »

I had a mortgage application that was a yes at aip and then rejected as they saw a payday loan from 2010 on my account and said they had changed their criteria and would not lend to anyone who had ever had a payday loan! But other lenders are ok with it

sorry to ask (I appreciate if you cant say) but which lender was this? Just I have a payday loan on my account from 2011 and just going through mortgage application now with Halifax. bit worried that this might hinder my chances!

binerds81

It wasn't halifax, it was with Dudley Building society. Their lending criteria doesn't mention PD loans and the packager and the underwriters had specific information on the type of loans and credit checked me which showed the PD loans as well they gave a yes at AIP stage then declined later at full application stage saying they weren't aware that I had used PD loans!

Good luck with halifax though, hopefully they won't mind them but a broker would know much better

Martynw89

Thank you for the replies guys. Because of the PDL, will we be paying an inflated interest rate on the mortgage?

I will look into a broker and use the brokers advise to help our cause.

Essex_Boy_2

Hey Martyn,
I am in a similar situation them bloody pay day loans and my choice to use them was so stupid. If only what we knew now I'd never ever use them again.
Have you managed to find a broker?