Chances of mortgage approval

tobuyornotobuy

Hi all, a quick one if anyone can help put my mind at ease or help out in any way, I have one default from may 2010 satisfied for £600 (payday loan) and other numerous payday loans on my file 8 from 2013 (Wonga) and then 2 more recent sept 2015 (I still thought they would improve credit rating and took them and paid back within a month £150 each).
I am applying for a £225,000 mortgage with £50K deposit house value 275K... my salary is £42k plus O/T earnings averaging me out to 60K (p60's back 3 years to prove income).
I have seen posts saying Halifax are generally pretty friendly to previous payday loan users, how do you rate my chances with them? any good? I would wait till the default drops off but I need to be out of my rented accommodation by may and I am loathe to pay someone elses rent when I could hopefully have a property of my own....

Contemptuous

I think you'd struggle on affordability, regardless of the payday loans.

Dave_Ham

There are likely to be competitive solutions now, albeit affordability is tight.

Rather than looking online at lenders, you are likely to optimise your chances of success by engaging a broker.

Good luck

tobuyornotobuy

I didn't think affordability would be a problem, I take home in excess of £3000 every 4 weeks and have 3 years payslips to prove it, my only commuted outgoing is car finance of £250, mortgage on 3.8% (5yr fixed) would be approx £1070 per month or am I missing something with the affordability stuff?

Thanks

tobuyornotobuy

Committed, not commuted

Dave_Ham

You are missing something I am afraid.

It's not about what you have left each month, it's about the lenders interpretation of your affordability based upon their model.

Most lenders work off laid out criteria, although in the current climate these are unlikely to go over 4.5 your salary. Your credit commitments will then be factored into this figure to provide your borrowing amount.

This will be incredibly tight, now factoring in your car.

Some lenders will accept all of your additional income at 100%, some 50% and some not at all and hence the broker recommendation rather than trying to work this through yourself.

Thrugelmir

tobuyornotobuy wrote: »

mortgage on 3.8% (5yr fixed) would be approx £1070 per month or am I missing something with the affordability stuff?

Thanks

Regulatory guidance is for affordability to be assessed at 7% interest rates. While they are low now, they might not be for the duration of a 25-35 year mortgage term.

pathtofreedom

Please don't feel you have to answer on here, but where did the 50k come from? As if you were needing pay day loans 2 years ago, that is a lot to save up that quickly. Any mortgage company will want to understand where that's come from eg inheritance, other house sale, lottery win...

If it is a gift from other family you might need to get them to write letters showing it is truly a gift you see. Just as a mixture of money laundering regs and so that the mortgage company doesn't have to worry about the relative changing their mind and trying to take a charge out against the house later.

tobuyornotobuy

10k saving, 40k inheritance

tobuyornotobuy

So my original application I was advised by in house MA to go for 30yr for affordability, now they have had my p60s for 3 years and 6 months payslips they have called me and recommended a 25yr mortgage instead... Is this a good sign?