Mortgage Application Declined due to oustanding Pay Day Loan

Ella_Davidson

Hi everyone

Myself and my partner are in the process of buying a new build. Here are some facts :

• Our earnings together sums up to £60k
• Our property value is £316,000.00
• Plot reserved
• HTB authority to proceed received

My partner has no credit cards or loans. I have a loan for the sum of £13,700 (taken last year) which I pay £390 per month. I have 46 months remaining and have no other loans or credit cards.
We have applied with Halifax and it appears that I have a Pay Day Loan *(PDL) outstanding. This does not show on Experian or Equifax and can only be seen on Transunion (aka CallCredit) credit report. I wasn't aware that it was a PDL as it was a Student lending called Smart-Pig and wasn't concerned as it never showed on Experian.

We have been declined as the PDL remains outstanding. I have cleared it just before I applied for my mortgage and my credit report has not yet been updated. In the past I have taken a number of PDL without realizing it was a PDL. I have taken a total of 11 PDL over the past 2 years.

Is there any hope for us in receiving a mortgage offer from any other lender? As we are approaching the exchange deadline and with most firms being closed over the Christmas Break, my broker said to wait until all firms have re-opened.

I would be most grateful if someone can share their experience of their Mortgage application with history or PDL.

Thank you,

Ella

ACG

There will probably be other lenders out there. What has your broker said?

Ella_Davidson

My broker said to wait for my credit report to be updated. Are there any lenders who only look at Experian and Equifax? Thank you for kindly replying!

ACG

Yes, but they may have a different stance on pay day loans (ie non in 12 months, none in 6 years etc) they may also see them on bank statements (money coming in or being paid out) and/or ask whether you have had any PDLs in the last x months or years. Your approach is a bit of a simplistic one for something that could get found out.

Honesty is the best policy, do the research right and you have nothing to worry or stress about.

Your broker sounds like they are either being lazy or does not have a plan B. Im not sure what to suggest, it would either be to wait or find a new broker I suppose (I say that as a broker who does not do HTB equity loans so I have no ulterior motives). I would probably ask the broker if they have a Plan B as it could be a few days or a few weeks to update.

haras_nosirrah

I do do help to buy and have clients who have had payday loans
Looking at criteria there are lenders who will accept with a current payday loan subject to overall credit score. A couple of them are high street lenders