Mortgage with past payday loans

nsrock1978

I'm looking for any advice based on any one's past experiences with payday loans and mortgages please. We are looking to buy using 'Help to Buy' with 5% of our own deposit. I have 2 adverse credit issues.
1) 1 settled default over 4 years old
2) payday loans showing in the credit file. Last one settled 8 months ago.
First one independent mortgage adviser advised me 'No' high street lender will lend to me with the payday loan in credit file not settled more than 12 months ago. Then I tried a different lender who advised me Barclays would lend and they don't have such lending criteria stating 'payday loans' would be an automatic decline. I'm bank with Barclays and me and wife went to the branch and we got a DIP. I raised the question about the payday loan from the bank's mortgage adviser and his response was '"Whilst they mention the need to account for current payday loans, there is nothing which states that such a loan in the last 12 months will be an automatic decline. If you have no payday loans now then there will be no issue.". I mentioned Bank's response to the first mortgage adviser but He's still confident that Barclays will turn down my application because of the payday loan. The property we are after will release in next month and we'd need to go for the full application then. I don't know what to do now. If anyone can give an advice will be a great help to decide. Many hanks

haras_nosirrah

I have recently received a mortgage offer with Barclays for someone from this website who had a payday loan in the last 12 months. They look at whether it was a one-off or whether there is systematic usage.

If you have an aip you should be fine

nsrock1978

Thank you HARAS_NOSIRRAH for the reply. In the last couple of years I have taken few of them. Not just last one which I settled on January 2019. Wasn't aware of the negative impact of them. Since then I have changed my job and my salary went up and will never touch those loans again. Do you think I will have an issue if they pick on the past multiple use of them? Thanks

MortgageMamma

You needn't worry, there are some small lenders mostly building societies that would do it if Barclays don't....obviously go with Barclays though if you can as better rates

SPM87

I asked about this for me too mate but didn't get any response... All I can tell you is me and my partner passed the hard check upon full application and is now going to go to underwriting...I did see someone in April get a Barclays mortgage on here who had 30 pay day loans in 2018 which makes me feel more relaxed about my historic payday loan use, however I do not have any defaults - it is worth checking their intermediary lending criteria to see if your clear from the default aspect.

One thing from trying to find out which bank doesn't mind them is I noticed all the high street banks who are quite generous with their lending don't like payday loan use... Barclays are quite tight with their lending amounts so I can only assume they are more relaxed on these sort of matters due to eliminating risk from the amounts they are willing to lend.

I also think 75% LTV eliminates alot of risk for the bank due to the help to buy

I wish us both luck!

nsrock1978

SPM87 Thanks for the reply mate. My adviser told as my default is 4 years old and settled I meet Barclays criteria. I wish you good luck. Please let me know the outcome. Are you going directly through the bank or through a broker? Thanks

SPM87

No problem, yes I went direct to Barclays as I was getting told mixed things from brokers and in the end they didn't know as much as me once I asked the banks directly about their attitude towards pdls - nationwide were the most tight lipped and unhelpful I found

I'll let you know how I get on

nsrock1978

SPM87 Did you hear anything from them? Barclays adviser phone me and said their underwriters have said as the payday loan is not an one off I would need to wait at least 12 months and come back to them in next January. Only issue for us is there will be no new build in our area next year. So I forget about the main bank and decided to go with a broker. He has already found a lender who'd be able to lend. Rate is bit higher than the banks..
But again I think It depends on the underwriter who check your case. So you may be get the offer.
Hope it will work for you.

haras_nosirrah

I thought that might happen - as I said earlier on barclays do lend with pay day loans but it is very much only if they are one offs if in the last 12 montha. Systematic usage in the last 12 months and they aren't interested.

Luluigi

nsrock1978 What lender did you go through in the end?

SPM87

Hi

I am still waiting for the case to be assessed, it's on pause or something... Whatever that means..i am trying to get them to push it through

Your feedback there is depressing to say the least...did they pass you on a hard check too?