Mortgage with no credit history

Dallybally

Hi. Sorry if this has been asked already, I have tried searching but all I am finding it help on bad credit history, my question is around no history.


My eldest is 19 and has landed a job on decent money. He's found a very cheap flat he likes the look of and thanks to us having been saving little each month for a long time he would have enough for 25% deposit.


The flat would only be just over 2 times his salary, he has no current outgoings or debt and at 75% LTV that ticks a lot of boxes on affordability and deposit.


However, he has literally no credit history. He applied for a credit card and was turned down, so I presume that is all he has on file. I will check it soon but don't want to start the free month too early.


I know he could go for a specialist credit card and build up history over time, but this flat is the right place at the right price, and they do not come up very often, only 4 have been sold in the past 10 years according to zoopla.


One option I thought was we could buy it as a 2nd home and he pays us. We'd get a decent rate but would get stung for 2nd home stamp duty plus he has a bit in a help to buy ISA and he'd lose the 25% bonus if we bought it.


So, my question is whether there are any banks that would lend to him with no credit history? Has anyone tried applying in a similar way?


Thanks a lot.

glentoran99

Dallybally wrote: »

Hi. Sorry if this has been asked already, I have tried searching but all I am finding it help on bad credit history, my question is around no history.


My eldest is 19 and has landed a job on decent money. He's found a very cheap flat he likes the look of and thanks to us having been saving little each month for a long time he would have enough for 25% deposit.


The flat would only be just over 2 times his salary, he has no current outgoings or debt and at 75% LTV that ticks a lot of boxes on affordability and deposit.


However, he has literally no credit history. He applied for a credit card and was turned down, so I presume that is all he has on file. I will check it soon but don't want to start the free month too early.


I know he could go for a specialist credit card and build up history over time, but this flat is the right place at the right price, and they do not come up very often, only 4 have been sold in the past 10 years according to zoopla.


One option I thought was we could buy it as a 2nd home and he pays us. We'd get a decent rate but would get stung for 2nd home stamp duty plus he has a bit in a help to buy ISA and he'd lose the 25% bonus if we bought it.


So, my question is whether there are any banks that would lend to him with no credit history? Has anyone tried applying in a similar way?


Thanks a lot.

Clearscore (Equifax) and Noddle (Call Credit) are free and aren't limited to a trial period

Dallybally

Thanks, I'll have a look. There can't be anything really on there though, any advice on mortgages with no credit history would be useful.

Thrugelmir

Speak to a mortgage broker there's no reason for options not to be available. Is your son registered on the electoral roll?

Has he opened a HTB ISA?

Don't open credit card accounts for no reason. Won't help the "score" in the short term.

Dallybally

I've registered him on electoral roll, won't be on until 1st Dec though. Does it make much difference? He has a current account to link him to address.

He has got a htb isa.

Thanks a lot.

michaeljpconlon

hi

I've no credit history either and got an approval in principal from the halifax for 4 times my salary and a 15% deposit. its worth going to a broker

M

Thrugelmir

Dallybally wrote: »

I've registered him on electoral roll, won't be on until 1st Dec though. Does it make much difference?

All helps in the future. Obviously at his age he'll have no history as yet. Building a credit profile takes time.

Dallybally

michaeljpconlon wrote: »

hi

I've no credit history either and got an approval in principal from the halifax for 4 times my salary and a 15% deposit. its worth going to a broker

M

Thanks. What does a broker get you on top of what they offer directly? Can they get you to the underwriters who are human and can understand the situation whereas in branch it could be a "computer says no" scenario?

ap1985

Dallybally wrote: »

Thanks. What does a broker get you on top of what they offer directly? Can they get you to the underwriters who are human and can understand the situation whereas in branch it could be a "computer says no" scenario?

Brokers should know which lenders will most likely accept you in such circumstances....

Dallybally

Could we hurt his chances by going direct to a lender first? I think Halifax sound a real good bet, I checked their lending criteria and he meets all, I just didn't have a clue on credit check side.

If we go there and they say no, would that be a denied application on his record that hurts going elsewhere?

Swash

I also have (almost) no credit history so was declined by 2 different high street lenders. I have a credit card but my mortgage advisor said because it isn't a large, regularmonthly payment, it isn't as good as having a loan, for example. I ended up getting an AIP for 90% LTV from Halifax. Hopefully the full application will go through.