Advice needed urgently please precise mortage

Rr1985

Hi,

I am hoping someone may be able to help us. My partner has recently applied for a mortage with precise through a broker.

With experian he has an excellent credit rating and we can see they have done a search on him on the 2nd of August. He has applied for an 80% mortage. He has no defaults on his file in the last 3 years. He did however take out a pay day loan 10 months ago as he had a big water leak in his flat and needed extra money to help him out. It was repaid just 3 days later.

He was rejected by the high street lenders. Presumably because of this pay day loan. He currently has a mortage with Santander. They offered to continue his mortage but would not lend enough even those his salary is 70,000 per year.

He paid precise the valuation fee which left his account on Tuesday however this evening we have checked his account and seen it has been refunded.

He meets all the criteria that precise state. The only negative is the pay day loan. He is looking to borrow £268000.

I'm sure we will find out tomorrow what the outcome is- but does anyone have experience of this happening and should we prepare that we have been declined?

Thanks in advance

AnotherJoe

Just how cash strapped is he if he can't afford to fix that kind of issue of a thousand or so out of his savings!? He must be living on the edge. What on earth is he spending £70k on?

Rr1985

Thank you for your response.

I am looking for advice regarding the mortgage application. The details of why my partner had to take out this pay day loan are of no relevance to this site.

DomRavioli

Rr1985 wrote: »

Thank you for your response.

I am looking for advice regarding the mortgage application. The details of why my partner had to take out this pay day loan are of no relevance to this site.

But they very much are - affordability will come into it, and this shows he cannot afford even a small unforeseen issue on a large salary, they will question everything.

Lets put it in easy terms. 80% of the value is 214,400. You say he already has a mortgage (but you don't say how much is left). The amount left will be added to the amount above. Most lenders lend either 3.5x or 4x salary. That would be 280k at 4x.

I'm guessing that there is more than 66k of mortgage left?

That would fail the affordability checks, as he is requesting more than 280k altogether (to pay off the mortgage of this property and to purchase a new property).

The payday loan may also be an issue, showing any lenders he can be irresponsible.

amnblog

Precise will generally look for a valid reason for a pay day loan.


I suspect your broker is already on top of it and you cannot control the situation anyway so stop worrying and it should come good.

Brock_and_Roll

As a banker, I can say that if I saw a case where a prospective borrower was on £70k, but had recently taken a pay day loan, it would ring lots of bells and generate many questions about the applicants financial management and cashflow situation.


I guess this is why the case is with Precise.

MEM62

Rr1985 wrote: »

The details of why my partner had to take out this pay day loan are of no relevance to this site.

Of course they are - it goes straight to the subject of affordability. If he is using payday loans then he is already struggling with day-to-day expenses. He may well fail any stress-test that they put on his finances.

densol_2

OP - its all about what one expects of someone on a high salary. So someone on £70k which is a high salary, would be expected to have some savings for a rainy day, a decent agreed overdraft with a main line bank and a good line of available credit ( decent available credit card ) So if someone on that salary goes to a "pay day" loan company, despite how those companies ' dress up ' their product as all sunny and great, they are considered a huge red flag unfortunately :-(

Thrugelmir

Rr1985 wrote: »

The details of why my partner had to take out this pay day loan are of no relevance to this site.

While the details are of no relevance. From a lenders perspective a PDL is lending of the last resort. Unusual for someone in a well paid job not to have access to other forms of credit. Even if it's just getting a short term overdraft facility through the bank. So while you describe it as the only negative. There's other factors which will be influencing the lenders decision.

Richey_

If your partner has no defaults in the last 3 years, how many does he have before that date still showing on his credit file - is in the last 6 years?