Previous arrears and getting a mortgage

Natrc

Myself and my husband have just had an offer accepted on a house! I was checking credit scores today, and noticed my husband's credit score with Equifax was quite poor, so I did some digging...

Turns out at the end of 2017 he went into arrears for 4 months (on check my file it shows a 1 1 1 1 ok S over a 6 month period at the end of 2017) before the insurance paid out and the following month it was settled. This was for his car finance agreement. He wrote his car off the month prior to this, and instructed gap insurance to pay the outstanding balance. I remember it taking a number of months for them to pay out and at this point he bought a new car on finance because he needed it. I suspect he probably cancelled the direct debits for the previous car prematurely thinking it would be covered by the gap insurance, he was 19 at the time, but he cannot remember. 

Anyway fast forward, I am now really worried it is going to affect our house sale. He has had a perfect credit record since this, has paid his past 2 car finances on time each month with no issue. 

We are getting a 90% LTV as only have 10% deposit (and sadly cannot afford more currently), and the property is 3.15 times our combined income (without my nearly 10k in overtime included). I have a very good credit score. The other complicating factor is my husband changed jobs to a new permanent role 7 months ago. 

Can anyone give me any advice? We are going to make our broker aware. We already have an AIP for a 95% LTV at 80k more than this property with accord mortgages. I am just really worried that my dream of being a homeowner and all my hard work over the last 5 years to make sure my credit score is great is going to go down the drain because of these arrears. 

london21

Speak with your broker.

Should be able to get a mortgage but the interest rates might not be the best.

jkrbec

from my personal experience I think you’ll be fine, I didn’t use a broker and went straight to halifax, I had 6+ missed payments on 2 accounts in 2015/2016, then 1 missed payment in 2017,2018 and 2019, lots of pay day loan history but all clean for 2 years, so if I can get accepted with all of that, i’m sure your broker will get you accepted with just 1 account having some adverse 4 years ago.

[Deleted User]

If you already have an AIP with Accord then I wouldnt worry too much.  That shows you can pass credit scoring with a lender at  95% so you should be able to pass even more lenders scoring at 90%.   

Natrc

london21 said:

Speak with your broker.

Should be able to get a mortgage but the interest rates might not be the best.

Thank you, my broker has a meeting with me tomorrow and I am going to send him copies of both of our credit files with the 3 major agencies because I want to be as transparent as possible so we can  have the best chance of acceptance. 

Natrc

jkrbec said:

from my personal experience I think you’ll be fine, I didn’t use a broker and went straight to halifax, I had 6+ missed payments on 2 accounts in 2015/2016, then 1 missed payment in 2017,2018 and 2019, lots of pay day loan history but all clean for 2 years, so if I can get accepted with all of that, i’m sure your broker will get you accepted with just 1 account having some adverse 4 years ago.

Thank you for sharing your experience it is a great help. Halifax has come highly reccomended by many people who have had similar experiences and would be my first choice of high street lender if everything with the broker doesnt go to plan. As you can imagine we were gutted when we saw this on the account, but this has given us at least some hope. 

Deleted_User said:

If you already have an AIP with Accord then I wouldnt worry too much.  That shows you can pass credit scoring with a lender at  95% so you should be able to pass even more lenders scoring at 90%.   

Is there much difference between a soft credit search and a hard credit search? Accord have done a soft credit search, and according to both of our credit files they have used equifax as their credit scoring source (which is ironic as my husbands worst credit score is on equifax). I am just concerned that this wasnt spotted when they did the credit soft search and when they do the digging they will find this credit issue from all those years ago and decline us. 

[Deleted User]

 

Deleted_User said:

If you already have an AIP with Accord then I wouldnt worry too much.  That shows you can pass credit scoring with a lender at  95% so you should be able to pass even more lenders scoring at 90%.   

Is there much difference between a soft credit search and a hard credit search? Accord have done a soft credit search, and according to both of our credit files they have used equifax as their credit scoring source (which is ironic as my husbands worst credit score is on equifax). I am just concerned that this wasnt spotted when they did the credit soft search and when they do the digging they will find this credit issue from all those years ago and decline us. 

Not really.  The only difference would be some lenders search one credit agency on dip and another on full app.   This can throw up a decline post aip if there is adverse on 1 file but not the other.    If you have been accepted with them searching the file showing the adverse then I wouldnt have any concerns about it if i were you.  

A soft search still searches the whole file.  It would be a waste of time if it was only a partial search

Natrc

Deleted_User said:

 

Deleted_User said:

If you already have an AIP with Accord then I wouldnt worry too much.  That shows you can pass credit scoring with a lender at  95% so you should be able to pass even more lenders scoring at 90%.   

Is there much difference between a soft credit search and a hard credit search? Accord have done a soft credit search, and according to both of our credit files they have used equifax as their credit scoring source (which is ironic as my husbands worst credit score is on equifax). I am just concerned that this wasnt spotted when they did the credit soft search and when they do the digging they will find this credit issue from all those years ago and decline us. 

Not really.  The only difference would be some lenders search one credit agency on dip and another on full app.   This can throw up a decline post aip if there is adverse on 1 file but not the other.    If you have been accepted with them searching the file showing the adverse then I wouldnt have any concerns about it if i were you.  

A soft search still searches the whole file.  It would be a waste of time if it was only a partial search

Thanks that is really helpful (as you can tell I am very new to all of this). Yes the information is present on all 3 credit files, but the dates are different on experian (happened 3 months earlier). My husband is going to contact the finance company and query this because it is a bit strange (which is why he thinks its an error due to the insurance issues).