Payday Loans history and New Mortgage Application

Ruben2019

Hi all.

I am in need of some advice and reassurance is possible.

Me and my wife have had an offer accepted for our dream property. We have completed the AIP and our application has just been put through with Halifax. She is a staff member so we have applied for approx £104k of the borrowing on staff rate which is base rate.

We offered £200k on the property and are putting down a £41,000 deposit from personal savings and also savings with the Help to Buy ISA. So we are putting down slightly more that a 20% deposit.

My concerns are that I have a history of taking out a lot of payday/unsecured loans (pushing 30) from 2016 to early 2018. My last one having been paid off in September 2018. I have previously had an overdraft facility and credit card but these have been cleared. I have never missed a payment on them or anything ever and my credit scores with all agencies are very high. I have no debts now and am in a good financial position. I feel so stupid putting us in this position when I wasnt aware at the time how much it would effect us. I thought taking out loans and paying them on time would look good for my credit file.

I made my Mortgage Advisor aware that I have a history of payday loans but she said to me as long as you don't currently have any it won't be an issue. I am still worried it won't go through.

What options do you think we would have if this was unfortunately to be rejected. Would we still be able to get a mortgage with someone with decent rates? I understand I will need to speak to a broker but I am looking for some advice beforehand. I will probably go through online mortgage advisor or london and country if this unfortunately rejects. Does anyone know which would be best in this situation.

I am making myself physically ill over what I know now is my own stupidity but I really don't want to ruin our chances of getting the dream property for us.

[Deleted User]

A lot of lenders have set criteria for payday loans and how long it is since your last one (usually 12 months since they last showed as active on the report)

Halifax go purely on credit scoring with all their adverse stuff so if you pass a credit score on the aip then it should be fine. I don't think I have ever had a Halifax case decline after being passed at AIP stage.

Ruben2019

Thank you. Are you sure that that definitely go purely on the credit scoring as I rate high across the main 3.

Have you ever had a case sent to halifax like this?

I am hoping if the mortgage advisor says it will be fine then I am hoping it will be. I guess they should know right?

[Deleted User]

Ruben2019 wrote: »

Are you sure that that definitely go purely on the credit scoring as I rate high across the main 3.

When people talk about credit scoring, they mean real credit scoring. The lender assesses your application against their criteria and produces a score.

This is entirely different from the pretend scores the CRAs provide.

Ruben2019

Oh yes. Their internal credit scoring. Can you give any further advice on my situation if possible

[Deleted User]

Halifax have an internal credit scoring system that changes depending on application type, incomes, ltv, fixed rates or trackers etc etc. A million variables probably.

If all the information was put in correctly and it passed then you will be fine. There is very rarely a manual underwriting approach with Halifax. It's all system driven.

If the information has any errors it may decline. Ask for a copy of your application data if you doubt rh mortgage advisor has put everything in.

Halifax are an oddity without any clear guidance on how long ago adverse credit has to be. They go completely off credit scoring. That's why a lot of brokers will sometimes stick a aip through to just see if it works, they have no clear guidance on what they do an dont take.

Like I said, I've never had an application decline with Halifax on credit based issues after a aip was approved.
For the advisor to submit an application you must already have an approved aip so it sounds like you will be fine

Ruben2019

Thank you for the advise.

Fingers crossed everything goes to plan.

Is anyone aware of any good brokers that i could go to if things don't go according to plan.

AB3II

I was in the exact same boat earlier on in the year last settled PDL was in October 2018 - Applied with Halifax with a LTV of 78% we were offered a mortgage and all was straight forward no questions or mentions from Halifax about the history of PDL - The waiting for a decision is horrendous but I believe you should be okay Keep us updated!

Ruben2019

Can someone give me a better understanding of the Halifax mortgage application process. What is the process after application has been submitted?

At what stage of the application is it checked by the underwriters? After the application has been put through? After the valuation and offer has been made?

And if there was an issue with your credit report would it usually be declined at that stage of doing the hard check upon application going through or after?

[Deleted User]

Ruben2019 wrote: »

Can someone give me a better understanding of the Halifax mortgage application process. What is the process after application has been submitted?

At what stage of the application is it checked by the underwriters? After the application has been put through? After the valuation and offer has been made?

And if there was an issue with your credit report would it usually be declined at that stage of doing the hard check upon application going through or after?

In my experience of working for Halifax and then as a broker, it is very rare for there to be a manual underwriting process. The people who check the case are there just to make sure the payslips match what is being keyed and income can be evidenced.

After the application is submitted a list of requirements is shown. This may be a most recent payslip or a bank statement or anything else required to evidence income.
This can be uploaded immediately
With my process I can then phone Halifax and they will pull that document and check it all matches up. This should leave the case as being offered subject to valuation pretty much within the hour post application.

Too much will have changed since I worked for Halifax for me to give you any comment on that but your mortgage advisor should be able to say if its similar. If its anything like it was when i was there, it is quicker to get a halifax mortgage through a broker than it is to go to halifax direct

Ruben2019

I spoke to my Halifax mortgage advisor today and asked her all the questions about how the application was getting on.

I asked where was it at now. Was it with the processing team or with the underwriters? She said that she doesn't send it to the underwriters as she underwrites the cases herself.

So i asked if everything was OK with documents we provided and if eveything was OK after the credit check and she said eveything is fine.

We have valuation booked in for Friday and then hopefully can get offered next week.

Looking positive but still keeping my fingers crossed