First time buyer and mortgage problems

alchemist.1

Some of the adverse credit lenders dont rely on a credit check.

Malmo

As above. There are lenders that do manual AIPs/DIP without credit scoring, which tend to be more reliable than automated ones that credit score.

Dave_Ham

Double check the the broker as cannot imagine the solution is tied in for 6 years for starters.

With the details provided there may be other solutions although if her income is supported by benefits then can potentially see why the selected lender was confirmed, although fancy the 6 years is incorrect.

Chacha17

So what does that mean? Do they formulate their own criteria? Or do they rely on higher costs if they know their may be something on their credit history? This is a minefield!

Malmo

Each lender evaluates an application based on their own criteria.

It's important to learn the distinction between a consumer score provided by Credit Reference Agencies like Experian, Equifax and Callcredit and credit scores calculated internally by some lenders. In the UK, no individual has a central or universal "score" that institutions can have access to and use, unlike the USA where this is the case.

In the UK, consumer scores are a marketing gimmick that serve no useful purpose. However, you can be credit scored by lenders based on their own algorithms that satisfy their internal customer profiling requirements. This has no relation to the scores from Experian, Equifax and Callcredit.

I would personally be trying to rectify the default first. The lesson for next time is to thoroughly review all 3 Credit files before any credit application and ensure that the data is correct and up to date.

Chacha17

Dave. Yes, she has benefits to support her income. The broker said this lender was the only one that came up and it was a 6 year deal. Do you think that going to another broker will leave another credit check? I am still at odds to help her as I find it hard to believe that she would be tied to 6 year fixed with the extras that add up in the way they do. The fixed rate is at 6.9% and penalties are high if she changes in the 6 years and she can't overpay without penalty. (Not that that is an option).

Chacha17

Thanks, Malmo, this gives me a better understanding of credit score versus consumer score. I agree that if we had the time back we would have ensured there was no default on her file. It's now the issue of the next step toward the mortgage. She wants this house. How do we know who will consider her at a reasonable rate? I just don't want to scupper her chances at losing a mortgage in the pursuit of a more affordable one. We want the best for our kids...

getmore4less

She had an agreement in principle with natwest direct,

where did this first mortgage advisor appear from?

As other have said fix the credit issues or this will just be a lot of money.

Chacha17

We asked a friend for a recommendation. The original offer was for slightly less than she needed. We thought a mortgage adviser would get a better rate so we contacted the recommended adviser.

Dave_Ham

Seek clarity on what you have been told, I think something somewhere has been lost in translation.

The lender selected (albeit the 6 years thing is probably inaccurate) is probably the only lender (barring 1-2 with potentially higher rates) that will lend enough.