Mortgage application- Credit Issues

Sk1990

Dear all,

I just wanted to get some advice on the best way to approach a mortgage with a few issues. I have had some previous issues, 1 default of £170 in Jan 2020 and a few missed payments all over two years old.

I also have been using payday loans, unknowing of their impact on my credit file. However these do not appear on my equifax Report. My question is, would it be possible to get a mortgage, or would I need to seek an adverse rate mortgage?

thanks in advance for any help!

dimbo61

Why not use a whole of market broker to look at your credit file and search for a suitable lender 

ACG

When are you looking to apply? 
What percentage deposit do you have? 

Sk1990

Thank you for your responses.
The house that me and my partner are looking at is £325,000 with a deposit of 25-27500.
I have been consulting a whole market broker who is thinking of applying for a mortgage at Halifax.
However I am worried it will be declined because of the previous credit issues.
what do you guys think?

Sk1990

ACG said:

When are you looking to apply? 
What percentage deposit do you have? 

Thank you for your responses.
The house that me and my partner are looking at is £325,000 with a deposit of 25-27500.
I have been consulting a whole market broker who is thinking of applying for a mortgage at Halifax.
However I am worried it will be declined because of the previous credit issues.
what do you guys think? 

K_S

@sk1990 Is the defaulted account showing on both Experian and Equifax? How recent are the pdls?

On the positive side, you only have one default on your file, it's for a small amount and registered more than 2 years ago, and you don't have any missed payment for 2 years.

The deposit being less than 10% may limit your options.

There's nothing to be overly worried about for trying Halifax as the broker only needs to run a soft-footprint DIP to get an indication of whether you meet the lender "credit-score" for the 95% LTV product.

Depending on the details you may meet the criteria for the Aldermore 95% LTV product potentially.

If all else fails, if there is a reasonable explanation for the small default and your files don't show a pattern of problem debt, there are lenders who don't credit-score and may be able to lend what you need. Off of the top of my head, I don't know if they are currently offering 95% LTV products though.

Hopefully your broker is able to get you what you need, good luck!

ACG

Options will be limited because of the LTV.
There are maybe 2 high street lenders I would try, but it is 50/50 at best. Halifax is one of those. Failing that you might need to look at something more specialist, maybe a little building society and of course as K_S says potentially Aldermore. 

Sk1990

K_S said:

@sk1990 Is the defaulted account showing on both Experian and Equifax? How recent are the pdls?

On the positive side, you only have one default on your file, it's for a small amount and registered more than 2 years ago, and you don't have any missed payment for 2 years.

The deposit being less than 10% may limit your options.

There's nothing to be overly worried about for trying Halifax as the broker only needs to run a soft-footprint DIP to get an indication of whether you meet the lender "credit-score" for the 95% LTV product.

Depending on the details you may meet the criteria for the Aldermore 95% LTV product potentially.

If all else fails, if there is a reasonable explanation for the small default and your files don't show a pattern of problem debt, there are lenders who don't credit-score and may be able to lend what you need. Off of the top of my head, I don't know if they are currently offering 95% LTV products though.

Hopefully your broker is able to get you what you need, good luck!

Thank you for the advice! 
The default is showing on both Experian and Equifax, I did try my luck and ask for the company to remove it but understandably they said no.
I ran a decision in principle myself a few days ago and it was approved, so I am assuming that it has passed the initial check at Halifax!

Thank you again for the advice, much appreciated.

Sk1990

ACG said:

Options will be limited because of the LTV.
There are maybe 2 high street lenders I would try, but it is 50/50 at best. Halifax is one of those. Failing that you might need to look at something more specialist, maybe a little building society and of course as K_S says potentially Aldermore. 

Thanks, I will give Halifax a go and see what the Mortgage broker suggests.

Sk1990

The latest Pay Day loan was from September, paid off on time but from my reading this is a big red flag.
Would this stop a mortgage?

Sk1990

Just to update, have now had an offer accepted on a property and our mortgage offer has been recieved!
so thank you everyone for your advice 😊