Mortgage broker - ask me anything

09oilers

Longtime lurker, first time poster and hoping for some guidance on how to approach securing a mortgage

In my younger (more foolish) years I defaulted on my overdraft to the value of £1300. This was in spring 2017, now over 5 years ago. I have paid the account off but the status on my credit file hasn’t been updated by the debt collector to reflect this. (I’m chasing it constantly but since I paid they are very difficult to get hold of!)

I’m now looking to buy my first property for £170k with a £44k deposit. Currently earn £36k basic. I’ve received a DIP from Nationwide offering a mortgage of £126k. 

What do you think my next steps should be? Speak to a mortgage broker? Speak to a mortgage broker that specialises in adverse credit (I did have a chat with simply adverse who were very keen to help but their fee is 2k)? Or continue a full application with Nationwide/a smaller BS myself? 

Thanks in advance

bubby08

Hi @K_S

hopefully my last question in this very stressful process. 

My broker has suggested I now apply for a AIP with Nationwide as my preferred lender it is a remortgage and as I am a company director, with a minimum wage salary and monthly dividends as earnings they believe this is the best fit.
 I am worried, which is stupid because it’s always been the case about a historic default on my file which is 5 years old. It’s in a different name but I haven’t managed to move it. I have given the mortgage broker a copy of my credit file with both Experian and Equifax, and although my scores vary on both, the information is the same, the thing I am worried about is applying and then being rejected and then not being able to apply anywhere else for a while as a result.  Would I be correct in thinking that the AIP would flag any prohibitive issue with my credit file would be Identified at this stage with a soft search so I will know whether to proceed with a hard search?

The mortgage broker is confident there won’t be any issues but I am slightly nervous.

Thank you for your help as always 

K_S

09oilers said:

Longtime lurker, first time poster and hoping for some guidance on how to approach securing a mortgage

In my younger (more foolish) years I defaulted on my overdraft to the value of £1300. This was in spring 2017, now over 5 years ago. I have paid the account off but the status on my credit file hasn’t been updated by the debt collector to reflect this. (I’m chasing it constantly but since I paid they are very difficult to get hold of!)

I’m now looking to buy my first property for £170k with a £44k deposit. Currently earn £36k basic. I’ve received a DIP from Nationwide offering a mortgage of £126k. 

What do you think my next steps should be? Speak to a mortgage broker? Speak to a mortgage broker that specialises in adverse credit (I did have a chat with simply adverse who were very keen to help but their fee is 2k)? Or continue a full application with Nationwide/a smaller BS myself? 

Thanks in advance

@09oilers If one 5+ year old default is the only blemish on your credit report, and you've managed to get past a mainstream DIP for the lending you need, then, based on the limited info in your post, I don't see any need for a specialist lender or broker.

Like the MSE guide does, I would always encourage buyers to consider using a broker purely to ensure that you get the best product available to you and also (hopefully, as this will also depend on the individual broker themselves) perhaps point out aspects that you may not think of yourself. Don't be put off by the thought of an additional cost as there are plenty of fee-free brokers recommended in the MSE guide.

K_S

bubby08 said:

Hi @K_S

hopefully my last question in this very stressful process. 

My broker has suggested I now apply for a AIP with Nationwide as my preferred lender it is a remortgage and as I am a company director, with a minimum wage salary and monthly dividends as earnings they believe this is the best fit.
 I am worried, which is stupid because it’s always been the case about a historic default on my file which is 5 years old. It’s in a different name but I haven’t managed to move it. I have given the mortgage broker a copy of my credit file with both Experian and Equifax, and although my scores vary on both, the information is the same, the thing I am worried about is applying and then being rejected and then not being able to apply anywhere else for a while as a result.  Would I be correct in thinking that the AIP would flag any prohibitive issue with my credit file would be Identified at this stage with a soft search so I will know whether to proceed with a hard search?

The mortgage broker is confident there won’t be any issues but I am slightly nervous.

Thank you for your help as always 

@bubby08 If the historic default is an issue, that *should* show up at the soft-check DIP stage.

bubby08

@K_S Thank You K_S I Will keep you updated. It does seem Nationwide are open to working with people with adverse credit.

best regards

bubby08 said:

Hi @K_S

hopefully my last question in this very stressful process. 

My broker has suggested I now apply for a AIP with Nationwide as my preferred lender it is a remortgage and as I am a company director, with a minimum wage salary and monthly dividends as earnings they believe this is the best fit.
 I am worried, which is stupid because it’s always been the case about a historic default on my file which is 5 years old. It’s in a different name but I haven’t managed to move it. I have given the mortgage broker a copy of my credit file with both Experian and Equifax, and although my scores vary on both, the information is the same, the thing I am worried about is applying and then being rejected and then not being able to apply anywhere else for a while as a result.  Would I be correct in thinking that the AIP would flag any prohibitive issue with my credit file would be Identified at this stage with a soft search so I will know whether to proceed with a hard search?

The mortgage broker is confident there won’t be any issues but I am slightly nervous.

Thank you for your help as always 

thudspud

Thanks for your previous help re. mortgage for self employed.

had our mortgage offer come through today from Halifax, impressed so far, issued within 7 days and 2 of those were bank holidays!

K_S

thudspud said:

Thanks for your previous help re. mortgage for self employed.

had our mortgage offer come through today from Halifax, impressed so far, issued within 7 days and 2 of those were bank holidays!

@thudspud Glad to hear that and all the best with the rest of the process

merudy

Hello. Me and my partner are hoping to buy a house soon.

We are looking at properties between 350-375k and have a 10% deposit. We have a joint income of 95k.

Debt wise we have an 8k personal loan with three years left to run but that's all.

My credit report is clean but my partner has a 5k credit card default from July 2018, settled in 2019.

Would this mean we wouldn't be able to get a mortgage or roughly what kind of rate could we expect?

Thanks very much 

K_S

merudy said:

Hello. Me and my partner are hoping to buy a house soon.

We are looking at properties between 350-375k and have a 10% deposit. We have a joint income of 95k.

Debt wise we have an 8k personal loan with three years left to run but that's all.

My credit report is clean but my partner has a 5k credit card default from July 2018, settled in 2019.

Would this mean we wouldn't be able to get a mortgage or roughly what kind of rate could we expect?

Thanks very much 

@merudy One settled default registered 3+ years ago should definitely not stop you from getting a mortgage. What kind of impact it has on the kind of lenders you can access at 90% LTV will depend on the specifics and what's actually in the credit reports.

James_D

Hi there, first thanks so much for this thread - I find it invaluable (and it isn't my first time posting here, but hoping it might be the last!)

I'm waiting for my mortgage application to (hopefully) be approved and an offer be sent to us from Clydesdale Bank. We submitted the application on 30 March and were expecting an answer last week. Instead they put some question to our broker who answered on our behalf. I've asked them what the question was but haven't heard back yet, although I assume it isn't anything too crazy given that if the broker could answer it then it's something I've already disclosed. 

I've just checked my credit profile on Experian and it appears that Clydesdale have now done a "recent search" on my credit report 3 times in the last two weeks - once on the 22nd, 28th and 29th April. All of which can impact on my credit score. 

Question is : Is this normal during a mortgage application process? Why would they need to search for my credit report 3 times? Aside from some credit card debt that is now slightly higher than I'd originally put down on the application (because it's taken them so long to process it!) my report is solid - I've got no adverse credit history, CCJs, defaults etc. 

Your insights into what they might be doing would be very useful. The other parts of the buying process are moving ahead now and I'm very keen to either get this offer or look at other options.

Thanks in advance,

James