When to obtain decision in principle.

Elwyn

My wife and I are looking to move to a new build in a development we have recently been to view.
Unfortunately our situation is quite complex and I was hoping for some advice on a few things.
Firstly, I have adverse credit from my student days to the tune of 6 defaults amounting to just over £10k. They are all just over 4 years old with the exception of one phone bill for £67 which defaulted January 2017.
All these were paid via a DMP well over a year ago, aside from the phone bill which I for some reason only noticed and paid off around 6 months ago.
The second difficulty is my wife is on maternity leave, returning to work February 2021.
With current equity and cash we estimate to have a deposit of around £75,000. The house we like is £300,000.
The current mortgage is in my wife’s name. The only other credit she has is a car loan for £397 a month. I have no credit commitments myself aside from a credit card with no balance.
With my wife being on maternity leave, and us not being too wise with our money over lockdown, our recent bank statements aren’t the best looking. There’s lots of takeaways, and lot’s of optimistic transfers to the savings on payday, with transfers from the savings a few weeks after pay day.
Our usual income is just over £50k gross each. We are both doctors so have secure employment and our salaries are only going to improve in the coming years.
I have asked a mortgage advisor to look into the feasibility of us obtaining a mortgage but just wanted to get an opinion from the experts on here also.
We would ideally wait for us to be in a better position but we have fallen in love with this house and it is the only one of our desired specification left.

Firstly, does a successful application look possible at this present time or is there too much holding us back?
We are now going to be as strict as possible with our bank account transactions, but will that reckless spending set us back if lenders were to look at our statements? 

Finally, if an AIP is obtained - how often does this go on to be declined at full application  with adverse lenders?

Thanks in advance for any replies!

ACG

The DMP is probably a bigger problem than the defaults, but a lot will depend on how your credit report looks. 

About 80% of what we do is adverse, I tend to only get a DIP when it comes to applying. The lenders you will be looking at are generally criteria driver (rather than credit score), so you know if you fit criteria or not and that is about as accurate as a DIP will be.  

My general view is that criteria and rates change - it feels like they change daily at the minute. The best lender today may not be tomorrow, so you could end up having a DIP that is not really worth much, not necessarily the end of the world, but it is an hour of my time I would never get back. 

Other brokers prefer to get you a DIP on day one, I suppose everyone has their own way of working and there is no right or wrong answer it is just down to personal preference and how people work. 

Elwyn

ACG said:

The DMP is probably a bigger problem than the defaults, but a lot will depend on how your credit report looks. 

About 80% of what we do is adverse, I tend to only get a DIP when it comes to applying. The lenders you will be looking at are generally criteria driver (rather than credit score), so you know if you fit criteria or not and that is about as accurate as a DIP will be.  

My general view is that criteria and rates change - it feels like they change daily at the minute. The best lender today may not be tomorrow, so you could end up having a DIP that is not really worth much, not necessarily the end of the world, but it is an hour of my time I would never get back. 

Other brokers prefer to get you a DIP on day one, I suppose everyone has their own way of working and there is no right or wrong answer it is just down to personal preference and how people work. 

Thanks for your reply.
I guess my reasoning for wanting the DIP is so we don’t reserve the house, advertise our current house only to be declined on full mortgage application.
I am obviously not an expert but have had a look at the criteria for companies such as Pepper Money and I do think we meet the criteria, I just worry the bank statements will lead to a decline.

ACG

Elwyn said:

ACG said:

The DMP is probably a bigger problem than the defaults, but a lot will depend on how your credit report looks. 

About 80% of what we do is adverse, I tend to only get a DIP when it comes to applying. The lenders you will be looking at are generally criteria driver (rather than credit score), so you know if you fit criteria or not and that is about as accurate as a DIP will be.  

My general view is that criteria and rates change - it feels like they change daily at the minute. The best lender today may not be tomorrow, so you could end up having a DIP that is not really worth much, not necessarily the end of the world, but it is an hour of my time I would never get back. 

Other brokers prefer to get you a DIP on day one, I suppose everyone has their own way of working and there is no right or wrong answer it is just down to personal preference and how people work. 

Thanks for your reply.
I guess my reasoning for wanting the DIP is so we don’t reserve the house, advertise our current house only to be declined on full mortgage application.
I am obviously not an expert but have had a look at the criteria for companies such as Pepper Money and I do think we meet the criteria, I just worry the bank statements will lead to a decline.

A DIP is obtained before bank statements are sent to the lender, you would only find out if your bank statements are a problem after the full application goes in and is underwritten.