Payday Loan impact on chances of getting a mortgage?

Kiwistrawb1990

Heyyyy definitely get in touch with a broker. 
I used PDLs a lot in 2018 and 2019 and secured a mortgage with a high st lender (Natwest) in July, I had paid off the last PDL in Feb 2020.
Potentially an oversight on Natwest's part because our affordability was so good and we had no other debt except cars on finance which were over half their term - so potentially they didn't delve that deep.
Still can't quite believe it myself sometimes. My credit file is a bit of a mess with PDL and a default from a 2016. Never thought I'd ever be able to own a home, at least not for another few years. 

Thrugelmir

dlv13 said:

Thrugelmir said:

dlv13 said:

Thrugelmir said:

dlv13 said:

 Affordability checks out easily and otherwise both our credit files are good in the last two to three years (except the credit utilisation - half of which will be paid off with the equity from the house sale and there is never a late payment on any of it).

Sounds as if there's more than initially meets the eye. Debt consolidation for one. Plus historic use of credit given the use of a Payday loan. These are more challenging economic times and lenders will be tightening their internal criteria. 

No debt consolidation - we've come up to (but never exceeded) our credit card limits since my partner's been on maternity leave, which I alluded to in the thread.  Always paid well over minimum payment, but we'll be paying all of the credit cards off with the equity from the sale. There will still be loans outstanding but we're not and have not consolidated any of our debts.

Absolutely take your point about the payday loan (hence the reason for the thread) but it seems bizarre that this would throw out an entire application - in fact the two previous posters seem to think the same as me so hopefully we can get a resolution.

That's being semantic. There's only one bucket. To make up the shortfall you are simply increasing the size of the new mortgage to effect the new purchase. Lenders can tell much from reviewing (it's an automated process using algorithms) your credit history / usage over the past 72 months as well. 

No, that's being specific.  Debt consolidation implies further borrowing to include all of your debts.  We are using equity to pay off an existing debt, the function of the mortgage is a house purchase and the deposit is coming from the same equity.

Besides which, without knowing any figures you couldn't possibly know whether or not increasing our deposit by the amount we intend to use to pay off credit cards would change anything (it wouldn't, we would remain in the <85% banding.)

Fully appreciate this is a public forum and I've asked for quite specific advice and I am hugely grateful for the messages I've received already.  But you haven't provided any and instead are seemingly picking fault or making implications where there are none to be made.

After a lifetime working in finance I've a grown a thick skin to people disliking what they don't want to hear.  I'll leave this thread now and wish you well for the future. 

dlv13

Kiwistrawb1990 said:

Heyyyy definitely get in touch with a broker. 
I used PDLs a lot in 2018 and 2019 and secured a mortgage with a high st lender (Natwest) in July, I had paid off the last PDL in Feb 2020.
Potentially an oversight on Natwest's part because our affordability was so good and we had no other debt except cars on finance which were over half their term - so potentially they didn't delve that deep.
Still can't quite believe it myself sometimes. My credit file is a bit of a mess with PDL and a default from a 2016. Never thought I'd ever be able to own a home, at least not for another few years. 

Thanks for this, nice to hear some positivity.  We're not after false hope, but knowing there is some is really reassuring thank you.