Mortgage application with no physical check?

Jack_Cross

Hi all,

I am a FTB and found the perfect flat. I am using the HTB scheme and have 5% deposit.

Unfortunately I have some payday loan use history, last settled June 2018. I have never defaulted/missed payments/late payments ect but fact there are even payday loans on my file is making me nervous despite brokers telling me this is not an issue for some lenders.

One broker has given me some information today which I wanted to check as it seems odd....they have recommended they apply Santander, as they use an automated mortgage system. So only if the application gets picked up for an audit or further checks will a human actually look into it and see the payday loans. She said these days, a lot will do automatic checking and if your score is 999,a lot of these will pass straight through. This was apparently backed up by Manager in underwriting who she phoned in the bank. This seems odd however and almost unbelievable that they could lend so much money without a human physically going through the credit report. Does anyone know if this is actually true?

She also said that if we were unlucky and an underwriter audits this case (50:50% chance apparently according to the underwriting manager at Santander), then we would go to Aldermore who now have a new tier in their lending policy for those with good credit who have had the odd adverse moment, such as payday loan, but this rate is 4.8%. So I could use this for 2 years and then move to a highstreet lender once the payday loans are 2.5 years old, and not just 0.5 years old. Is this true?

Thanks for any help on this

ACG

There are lenders who will treat pay day loans like any other loans.

Santander hoping they do not look at your application and then to Aldermore is a different process to the one we would go through. My theory is find a lender it fits with and apply to them, its worked well for me for the last 6-7 years, but each to their own I suppose.

Jack_Cross

Is it true though that there are lenders who do not physically check the credit report and a score such as 999 can just lead straight to an offer subject to valuation?

Xyzzy

Most lenders wouldn't manually go through your credit file, they have algorithms that do this for them. They don't use your experian/transunion/equifax score either though.. you have no such thing as a 'credit score'- these are just subjective interpretations of your credit history put into a number which is apparently indicative of your credit worthiness
Each bank will interpret your credit history differently, for example, one bank may automatically decline anyone who has had a payday loan (this is just a crude example), whilst another may have an algorithm that treats payday loans as normal loans, while another may have an algorithm/scorecard which refers all applicants with a payday loan on their file for a manual underwrite

amnblog

What a lot of waffle to explain there is a plan A that might work but plan B is a bit of a stab in the dark.

Perhaps you need a Broker like ACG who's process is to put you where he knows you will fit, not rely on the case not being checked by humans.