Payday loan history and mortgage

[Deleted User]

Hello all,

I got trapped in the payday loan cycle in a really, really bad way - at its "peak" my payday borrowing was around £7k with six different lenders Anyway, I slogged long and hard and paid off every last penny of principal and interest, finishing about 18 months ago. I still hate myself every day, but I made it.

Since then - with more slogging - I've managed to save up a deposit for a 95% HTB mortgage (plus extra savings for stamp duty and fees). Running the theoretical figures through the online calculators of the major lenders based on my current salary I comfortably meet their affordability criteria for the type of property I am looking for. However, I don't want to approach a broker until I get a feel for whether it's even worth it.

I have no debt. I've checked all three credit files and there are no defaults, arrangements to pay, late payments or CCJs. They show two credit cards used and paid off in full each month for 18 months, perfectly run mobile/media contracts and a bank account which has never been overdrawn. But under settled accounts my shameful history is there - constantly paid off and re-borrowed payday loans, and a closed current account which had a heavy overdraft (albeit always within its limit), with the last entry dated 18 months ago.

So is there any point? I've fought long and hard. Ordinarily my advice to myself would be to not bother, and keep saving up a deposit to increase my chances of acceptance but unfortunately I live in London, where prices keep spiralling and my rent is higher than the repayments would be.

So: has anyone ever managed to get a 95% mortgage with this kind of history? Should I keep waiting and saving like crazy, or should I try calling a broker? Is any PDL an automatic no?

Thank you so much from a reformed idiot x

cherry_three

PayDayPhoenix. My husband done same thing over 3 years ago. And we want a mortgage in his name. I know personally of a couple of friends that have just been approved and one if them had PDLs more ir less 12 months ago(with Santander). The general feeling on here is to contact a broker, we are going through same thing ourself although his last PDL was over 3 years ago. I have just seen a post on here from a broker saying (words if this affect) that lenders will often lend if you have a good past within last 3 years. Even CCJs over 3 years if they are settled. I got 'contact a broker' alot and I will but sometimes wonder if CCJs can get overturned after 3 years surely PDLs can. But no one ever says it except one guy who said there us alot of scare mongering goes on in here, either that or brokers are clearly plugging their business. Take a look at my thread. Or at Teaanndtoasts tread, I came across his posts earlier and found it reassuring. He was in a similar position as us and was successful. Best of luck.

TBeckett100

Going to a broker isn't scaremongering. If you apply to the wrong lender and get declined you'll end up with a dented credit file. Do that again and no lender will touch you (low credit score plus payday history)

I know a broker personally and some of the things he has had to do has been worth his weight in gold

alchemist.1

There are lenders who will also point blank reject anyone who has had payday loan in last 12 months but accept someone who has a CCJ over 24 months ago so it's not all scaremongering.

A lot of lenders will see Pay Day Loans as a contributory factor to rejecting an application.

cherry_three

But that was my point. How can a PDL be seen worse than a CCJ. Country gone mad. Anyway point is to OP that its not impossible and yep a broker will help massively, we are doing the same.

dander

I'm sorry, I can't offer any advice, but I just want to say bloody well done! To get that far in payday debt and sort it all out AND then get savings is hugely impressive to me.

[Deleted User]

dander wrote: »

I'm sorry, I can't offer any advice, but I just want to say bloody well done! To get that far in payday debt and sort it all out AND then get savings is hugely impressive to me.

Thanks - I was destroyed mentally, emotionally and financially so I had nothing to do but direct my despair into rage and determination! Not easy to do but I will start saving with a Credit Union as soon as possible in case that helps other people avoid my misery.

[Deleted User]

alchemist.1 wrote: »

There are lenders who will also point blank reject anyone who has had payday loan in last 12 months but accept someone who has a CCJ over 24 months ago so it's not all scaremongering.

A lot of lenders will see Pay Day Loans as a contributory factor to rejecting an application.

Thank you for the heads-up - I appreciate it.

[Deleted User]

cherry_three wrote: »

But that was my point. How can a PDL be seen worse than a CCJ. Country gone mad. Anyway point is to OP that its not impossible and yep a broker will help massively, we are doing the same.

In the case of one PDL I agree; in the context of a mortgage and years of PDLs it's only fair really that both are regarded as financial mismanagement. My challenge is to prove that I have turned it around and am a completely different person financially!

Thanks for your advice, will check the main MSE site for broker recommendations.

[Deleted User]

TBeckett100 wrote: »

Going to a broker isn't scaremongering. If you apply to the wrong lender and get declined you'll end up with a dented credit file. Do that again and no lender will touch you (low credit score plus payday history)

I know a broker personally and some of the things he has had to do has been worth his weight in gold

Yup, I'm now getting bombarded with offers for cashback credit cards, high-interest current accounts with 0% overdrafts and the like (which MSE soft-searches indicate I have a 90% chance of success with) but I'm not touching a thing, let alone a "speculative" mortgage application! Thank you for your help.

[Deleted User]

cherry_three wrote: »

But that was my point. How can a PDL be seen worse than a CCJ. Country gone mad.

Exactly - I'll never understand it either



I borrowed from one of the 'big' lenders just over 4+ years ago and I noticed this year their entry has completely vanished from my report....