Mortgage with past payday loans

Louis_16v

Hi All

I opened up a help to buy ISA earlier in the year with Natwest who I've banked with for a number of years.

During the application the advisor ran through some questions and indicated that the system was showing that I would be 'highly likely' to be accepted for a mortgage based on my account activity.
Today it occurred to me that I took a number of payday loans during 2013 when money was a little tight, these were all paid back on time.

What I didn't realise is how poorly these are looked upon during a mortgage application and from reading up could potentially scupper my chances for mortgage.
I wont be in a position to buy for around another 12 months so does the fact that these loans were taken over 3 years ago change the situation at all?
I haven't taken one out since I've changed my spending habits and have been regularly saving for a deposit.
My credit reports are clear apart from this with all utility bills, phone bills etc up to date with no missed payments since they began.

I've contacted Natwest who didn't give a concrete answer and suggested I see the internal mortgage advisor.
I'd rather not waste my time if it's going to be a flat out decline at the first hurdle.

Thanks

Newbie321

I had a payday loan every month for 18 months, 5 years ago. There are still a few showing on my credit file.
We've just been approved for a 95% mortgage on a £425k house. It was with Halifax via a broker, and no questions were asked about payday loans at any stage,

neilh2245

Really depends on the rest of your financial circumstances! Have to say 4 months ago when looking ot take out my first mortgage I followed the advice and checked out my credit files - horrified to see that my credit rating was scored as "Very Poor" having taken out loans in the past....... looking up the meaning of "very poor" which stated i'd be highly unlikely to be offered ANY credit...... 4 months on and am sat in the living room of my very own home (with a well earned glass of wine) having had the mortgage application fly through with no problems or questions about the past loans and only putting down a 5% deposit...... guess it really depends on which lender you go with! Hopefully will provide some reassurance that there is hope!

Louis_16v

Thanks for the reply, that's encouraging.
I'll likely be in a similar situation to you when I come to purchase albeit with a lower amount.

Louis_16v

Thanks Neil.
My credit report similarly show me as poor despite never missing payments, have a high limit credit card, phone contract etc.
I've read to not be too concerned about the actual 'score' and focus on the details within.
I think thats definitely the case with me.
Congratulations on your new home too.

giorgio992

Hi neil, just wondering who you went with for the mortgage?

Mattib0110

My report shows poor too, applied with halifax for mortgage had a few issues regarding earnings as self employed just waiting now on decision so hopefully comes back ok

giorgio992

Mattib0110 wrote: »

My report shows poor too, applied with halifax for mortgage had a few issues regarding earnings as self employed just waiting now on decision so hopefully comes back ok

Let us know how you get on, I'm going to be going through same process soon

csgohan4

if your using an estate agent broker, good luck, your going to need it

ashp_2

I have a few payday loans on my credit file within the last 2 years. Just got my first mortgage on a 290k house with Santander 90% LTV, no issues.

nicholbb

I had very good credit score, no payday loans and could go as low as 70% LTV. Was rejected by Santander because of a 0% credit card (from Santander) that had been fully paid off.

Went to Halifax and no issues and got higher mortgage. Different lenders have different computer says yes criteria.

Not endorsing or criticising either bank, just way it was for me.

Edit: Just to add, good luck, when it happens it feels good.