Mortgage advice please!

VCL34

Hi there, looking for advice please.

I am applying for a mortgage on my own. I have 2 dependent children. I earned just over £33,000 per year & £5300 per year between child benefit & maintenance payments.
I am a 1st time buyer & was looking to do help to buy with persimmon. I have a deposit. Spoke with the mortgage broker that persimmon recommended. He took all my details & applied to Leeds Building Society. They came back to him & said they would not take the maintenance payments into account & would therefore only lend £120,000 which isn't enough for the house I was looking at. He then applied to Barclays as he said they would take the maintenance into account. I was quite surprised when Barclays declined completely.
I have a credit card with £600 currently on it & told the broker that this would be settled in full by the end of the month. I had a default on a mobile phone account for £114 back in March 2015 however this has been settled in full. The last time I had any late payment was over 2 years ago. My credit rating was poor prior to settling the default & my credit card utilisation was high before I paid a chunk of it off. My credit score on Equifax is good and it reflects the new credit card balance & the settled default which is why I was surprised at the straight decline!
I have a free credit score with Experian through my credit card and it updates every 60 days. This is still showing my credit rating as poor and is due to update in 10 days. I've tried to go on & buy the full report to see if maybe the default isn't showing as settled or the credit card balance hasn't been updated but I think the site is down as it won't let me purchase it just now.

Is it possible that leeds have searched Equifax and barclays have searched Experian?

I'm really frustrated by the whole situation. Have been trying so hard to build my credit score so I'm more appealing to mortgage lenders. Dont know where to go from here. Any advice is welcome! Thanks!

National_Debtline

Hi VCL34 and welcome to MSE,


It is possible that they have checked different credit agencies, but they will also have different criteria that candidates must meet. You don't need to pay for the statutory credit reports, they are free now. It would be worth checking the report off all 3 agencies, not the scores (Experian, Equifax and Transunion) as the information can vary slightly.


Your credit file will show whether or not you are on the electoral role (which you should try to be), anyone you have a financial association with and of course your credit history. Previous defaults could be part of the issue here, even though they have been paid now. And at the moment you will also have 2 searches on your credit file, and multiple searches can also start to cause damage but these should come off after 12 months. Otherwise your credit file is a 6 year rolling document.


Future lenders will assess your credit worthiness and affordability when you apply for the credit. You may want to speak to an independent mortgage broker before making anymore applications, but be aware they will likely charge.


Laura
@natdebtline

Thrugelmir

How much are wishing to borrow?

What's the purchase price of the property?

What's your deposit?

Suspect the answer lies in affordability.

haras_nosirrah

Leeds was a bad choice if you need to use any child related income as they simply won't accept any of it.

If you can give us some figures we can look at what may be possible - I have in my head a potential option including the default as it is over 3 yrs old but would depend on how the whole case would stack up.

VCL34

The house that was available was £194,000.
With help to buy the mortgage required was £155,000 and the deposit was just over £9000. The sums the broker done said I could obtain a mortgage of £165,000 based on my income. There are cheaper houses that I would be interested in but that was based on the one they had available.

VCL34

I'm in Scotland so think there are only 7 lenders who do the help to buy scheme.

haras_nosirrah

any childcare costs?

haras_nosirrah

take it it is an 85/15 rather than an 80/20 scheme judging by mortgage amount vs house price

VCL34

No childcare costs thankfully!

VCL34

So it's 80% Mortgage, 15% government equity loan and 5% deposit.

jaelato1

Did Barclays tell your broker why you were declined?
You might want to look for another broker because if you had told your broker you want to use your salary and other monies as income then s/he shouldn't have applied to Leeds in the first place