Mortgage/Payday Loans

Martindhenry17

Hello, we are looking for a mortgage but have been turned down for a DIP from Halifax. My mortgage broker believes this is due to a payday loan on my file being under 1 year old (only 6 weeks away from being 1 year ago) 

I do have more payday loans on my file that were all closed more than 1 year ago, but my question is if anyone knows how far back these have an effect from (eg 1 year, 6 months)

they were all paid and closed on time with no issues at all.  

Any help would be great as we have worked hard to get a 10% deposit saved and I already have my house to sell but worried that we will now be set back for a long time until it’s far enough in the past for lenders be able to offer us something.

any help/advice would be appreciated 

thanks

K_S

@martindhenry17 There is no black and white answer to your question as it depends on the specific lender and the rest of the case.

If that's the only blemish on your credit history, you should have options at 90% LTV. With some of the high-street lenders, the only way to say what impact it may have is through a DIP.

What is your broker suggesting as next steps?

Martindhenry17

Thanks, nothing suggested at the moment from broker, he had stated that he would try and find something for us but it would probably need to be 12 months clear.  Its a bit down heartening as it’s so close to being 12 months and there is a closing date for a house we are interested in closing tomorrow. 

I take it it would be a case of trial and error working through lenders to see where we can go.  Just worried about finding someone the it being rejected at full application stage 

[Deleted User]

Martindhenry17 said:

I take it it would be a case of trial and error working through lenders to see where we can go.  

Your broker should have a better strategy than just trial and error in placing your application. They should be using their knowledge of lender criteria to place it appropriately.

K_S

@martinhenry17 Sorry if it came across that way but it definitely should NOT be a trial and error process. I would run it past the lender before doing a DIP. What I meant is that (like the broker did for Halifax), for some high-street lenders there is no balck and white policy on payday loans so sometimes even if you talk to the lender they'll tell you it's subject to "credit-score" and to do a DIP and see.

But (based on the limited info in your post), even if you draw a blank on the high-street, you should still have options. If your broker says you don't, then I would recommend getting a second opinion before giving up.

Martindhenry17

Thanks appreciate your information. I am a bit confused by it all, but I assume as I haven’t heard from mortgage advisor he is contacting lenders before applying for a DIP.  He did suggest waiting until the 12 months is passed as I assume more may open up then? We did consider 5% as my partner is first time buyer but again it will narrow suitable lenders down again I presume?

K_S

@Martindhenry17 If you haven't passed a Halifax DIP at 90%, passing one at 95% is highly unlikely as credit-scoring requirements are even higher, generally speaking.

Martindhenry17

Thanks, we didn’t really want to go 5% but would have freed up some money to be able to offer more over the asking price (most houses seem to be going a lot higher at the moment)

Martindhenry17

@K_S My MA has just came back and suggested waiting 3 months then looking again.  However...I have just done a mortgage comparison on Experian and a number of mortgages are showing as excellent eligibility?? Should I go it alone and try for one of those?

K_S

Martindhenry17 said:

@K_S My MA has just came back and suggested waiting 3 months then looking again.  However...I have just done a mortgage comparison on Experian and a number of mortgages are showing as excellent eligibility?? Should I go it alone and try for one of those?

@martinhenry17 I know almost nothing about your case so can't really give an informed opinion on what you should do. At 90% LTV, I would recommend using a broker. But if you've been put off by your experience and want to go direct, as long as the DIP is a soft-check (most direct DIPs are) and you are confident that the information is being input correctly and consistently, you can consider trying yourself.

Wd85

I have a dip with Halifax and my last payday loan was in January but I only need to borrow 78,000 with a large deposit. I was told Halifax are the best ones to try with recent PDL