No credit history- Could I get a mortgage ?

Rosie_Potter

We have been renting a house for 4 years and our landlord has told us he wants to sell. He offered us "first dibs" and will be gifting us the deposit.

I have never had a credit card or loan and so don't have enough activity to populate a credit file. Ideally of course I would have spent 6 months or a year working to boost my credit rating before embarking on a house purchase , but this has taken us by surprise.

We are working with a broker. We got a Mortgage Agreement in Principal from Nationwide. We passed the affordability criteria, and the "soft" credit check but then were turned down when the full application was submitted.

Our broker applied to Halifax on Friday and we got a Mortgage A.I.P from them too. The full application will be submitted next week.

The Halifax online guidance says they accept applications from people with little or no credit history, but would it be foolish to get our hopes up?

ACG

The broker must have some confidence otherwise they would not spend an hour or so submitting an application.

That being said, there are also lenders who do not credit score, so you should have options even if Halifax say no.

Rosie_Potter

Or broker mentioned Kensington as an option in one of our earlier conversations but when I suggested them after Nationwide turned us down he said that Kensington were for those with "bad" credit history rather than "no" credit history.
It is encouraging to hear all our options are not exhausted yet though, thank you

ACG

Definitely. Im not sure you need anyone like Kensington, that is like using a sledgehammer to crack a nut.

Rosie_Potter

Are there any you would suggest for a case like ours?

ACG

I am not allowed to recommend lenders without a lot more information.
See what your broker comes back with, they will have a factfind with a lot more to go off.

Lemonsqueezer78

I always thought Nationwide did a hard search/full scoring at the DIP stage. I realise that doesn't mean the case will 100% go through and that it can always be reviewed, but was curious to know if they had changed recently?

Rosie_Potter

Our mortgage broker told us that both Nationwide and Halifax just do a "soft search" at the D.I.P stage

Thrugelmir

Rosie_Potter wrote: »

I have never had a credit card or loan and so don't have enough activity to populate a credit file. Ideally of course I would have spent 6 months or a year working to boost my credit rating before embarking on a house purchase , but this has taken us by surprise.

Your history takes may forms. Registering on the electoral roll, not using an overdraft facility on a frequent basis, paying your utility bills on time, mot defaulting on a mobile phone contract all helps to build a picture. There's no need to obtain credit and repay it. As proves absolutely nothing.

Then there's the nature of your employment, how long you've been employed. These are some of the additional factors which helps the lender profile you.

Huskymumma

Try using another broker. I work for a broker (but I am not one) and know full well that NW would have turned that down with no credit history. Yours is not an unusual scenario your broker should have known or been able to research how to deal with your relatively straightforward situation.

Its imperative that you seek further advice, don't try and do this on your own if you've lost confidence in your broker, tell him so and move on to someone else with more experience. And make sure you go for a mortgage broker, not an IFA, you need someone who has focused mortgage lender knowledge.

Good luck

Mortgage_Adviser

OP, is your broker is fee-free by any chance?
Nationwide don't do a sof search only a hard search.