Mortgage DIP refused - how long to re-apply after paying off cards

SussexTom79

Hi - I've found a unique property that I really want to the extent that I wasn't looking before it was shown to me and I will probably wait another 12 - 18 months before looking again if unable to obtain a mortgage for this one. As this wasn't planned, I hadn't got my finances in order ahead of an application. My savings were in ISAs earning more interest than on my credit cards and have managed to build up a 10% deposit.
I need to get a shared ownership mortgage with income from my own Ltd company (but classed as self employed by most lenders, I believe).
I had an online application (DIP) rejected by Halifax and then went to meet an advisor in branch who said it was due to a 'fail' on the credit score.
I had looked at Credit Karma (Noddle) and had a 'fair' score.
Since the DIP refusal I also checked the other reports and found; Credit Karma (566 = Fair), MSE Credit Club (561 = Poor) and ClearScore (366 = Stable).
I need to pay a reservation fee on the property which seems pointless if I'm not going to be able to get a mortgage.

In branch, the Halifax advisor said that it showed as affordable as have other calculators I've found and used online.
I'm fairly certain that the issue was with the high utilisation of my credit cards (at 90%), but I've just reduced them over the last few days to under 50% and expect to reduce by another 10 - 20% further next month.
The only other negative factors I can see are one late payment on a credit card in Jan 2017 and 3 recent credit searches;
1 for switching utility providers, another for upgrading phone handset and another for a loan to consolidate the credit cards (that I ended up not going for as the interest rate offered was higher than one of the credit cards so it seemed pointless.

Can anyone please tell me if I can expect a quick hike in my credit score from reducing my card debt so that paying the reservation fee isn't going to be a total waste of money?

Also, I've been told that only Halifax and Virgin offer shared ownership mortgages to contractors hence approaching Halifax directly, but have since read many recommendations to always go through a broker, so I'm happy to hear from any brokers who have expertise in situations like mine.
Thanks

MovingForwards

What's the property value?
What's your actual income?
What's showing on your credit history? Late payments? Defaults? Missed payments? CCJ? iVA? Bankruptcy?

Lenders don't see the scores generated by the credit reference agencies as they have their own algorithms and internal scoring.

MovingForwards

How long you been self employed and had your business.

How much debt do you have.

SussexTom79

This is from my clearscore report and may be useful:

Things you're doing well
You don't have any court judgements, bankruptcies or Individual Voluntary Arrangements
You have no accounts in default or repossession
You've been on the electoral roll at your current address for a long time
You have held at least one of your accounts for several years
Very few/none of your accounts have overdue payments
Your largest credit card limit is relatively high
Your current Telecoms balance is relatively low


Things to improve
Avoid making too many credit applications in a short period of time.
Avoid going over your credit card limit again
Try to use less than 50% of your credit card limit

SussexTom79

Income is £80K/year.
Property value (for 25% share) is £236,250.
Available deposit 10% of above.
Card debt was £40K from £50K credit, now down to £25K.
1 Phone loan (£700) and 1 retail finance loan (£1300).
I can pay all this off using a gift if required, but was trying to avoid that and do it all on my own and in case lender comes back and only offers 85% LTV.

[Deleted User]

They’re not looking at the CRA scores.
No one does.

It’s likely the CC utilisation as the cause especially if not on a 0% promo.

kingstreet

SussexTom79 wrote: »

...a 10% deposit.

I need to get a shared ownership mortgage with income from my own Ltd company

I need to pay a reservation fee on the property

one late payment on a credit card in Jan 2017 and 3 recent credit searches;

only Halifax and Virgin offer shared ownership mortgages to contractors

Right. The above is all that is actually relevant from the verbiage supplied.

Is this a SO resale, or newbuild? House or flat? Presumably a resale, as Halifax has a 85% max loan on newbuild flats and houses. VM's is 75% on flats, 90% on newbuild houses. But reservation fee suggests a newbuild?

Do you want to work from your SE earnings (two year-averaged director remuneration and dividends) or daily rate (bearing in mind the latter usually only works if your gross contract value is £75k pa or more?).

It sounds like you need an experienced SO/newbuild broker who knows what questions to ask.

boo_star

!!! wrote: »

They’re not looking at the CRA scores.
No one does.

It’s likely the CC utilisation as the cause especially if not on a 0% promo.

And probably...

Avoid going over your credit card limit again

SussexTom79

It's a new build and it's a house. Reservation fee is with the housing association.
Would rather work from contract which has just been renewed for another 12 months at 80k which is a monthly rate rather than day rate, (but I'm sure I can have the contract amended to reflect that if needed).
Yes, I agree I need an experienced broker - can you recommend anyone, please?

MovingForwards

Brokers can't advertise their services, but there is nothing stopping you approaching one on here by private message. Many of us have

Aside from the above you are best of ringing around some advertising whole of market, shared ownership brokers.

Thrugelmir

SussexTom79 wrote: »

Property value (for 25% share) is £236,250.
Available deposit 10% of above.
Card debt was £40K from £50K credit, now down to £25K.

Bottom line is that your deposit appears to be borrowed. If I were earning the income you state you are. Why the lack of savings?