Advice re mortgage app with precise?

Fizz_Bomb

Hi all, 

Looking for some advice/reassurances re our current complicated situation…

my partner and I have been saving hard for a few years and have just, via a broker, began the rollercoaster of house/mortgage hunting. 

Background….I had to take out an IVA in jan 1017 after a divorce, which I settled in 2020 and it dropped off my account in jan 2023. However, a Barclays loan is still showing on my account as defaulted in jan 2018 despite it being included in IVA. I’ve raised this with Barclays and they have advised me it’s being dealt with. The default was for £4200. 

Other than that, I now have no debt, a steady, modest income, partner is self employed but also has a decent income with 2 years of accounts and we have a 15% deposit. He has excellent credit rating.  My credit rating, is actually quite good despite my history, although I know this stands for very little. 

A broker did a soft search the other day and we were outright declined, the broker citing my default as a reason and my previous Iva. 

He approached precise, who have given us an approved DIP, but with an eye watering interest rate of 6.1%.

For info, our deposit is 42k, house price 275. 

The broker has mentioned trying Halifax as they are apparently a more forgiving lender with blips?? but I’m worried about too many searches on our accounts.

my questions are really…

1/ how likely is it we’d be approved by either Halifax or precise?

2/ would my default from 5.5years ago really affect us this much? And should my Iva be affecting us given it was 6.5 years ago from start?

3/ what happens next now we have an approved DIP from precise? It says we must apply in 28 days or it’s invalid 

4/ is it worth approaching Halifax, is what the broker said true?

thank you in advance for any help or advice 

K_S

@fizz_bomb How is the 4.2k default showing up as on your file - satisfied or unsatisfied?

Quick comments on your questions -

1) Precise  - if you've got a DIP then you've got as much assurance as you can at this stage
Halifax - again, it's hard to say without doing a DIP. If you pass a DIP, then that's a green signal. It can still be declined at full app due to the historic adverse based on the subjective opinion of the underwriter, but the likelihood is low.

2) It's important to keep in mind that no two apps are the same. I've had clients with a single 4 year default fail to get a mainstream rate while another with 2 defaults got the cheapest rate available at the time. There are a lot of factors that go into lender 'credit-scoring' (nothing to do with your Experian/Equifax credit score) for mainstream lending.

You may have other options like Accord cascade (Accord's slight off mainstream rates for people with historic adverse), smaller building societies that don't credit-score (they'll look at the application with a common sense lens) and offer close to mainstream rates, etc.

3) If you wish to proceed with Precise, the DIP can be promoted to a full application within 28 days. If it expires, as long as your cirucmstances/credit-file hasn't gone worse, and Precise hasn't tweaked their criteria significantly, your broker should still be able to get a fresh DIP.

4) Definitely worth a DIP I'd think given the difference in rates. Don't worry about the checks as with the vast majority of mainstream lenders (incl Halifax), the DIP is a soft check. 

Barclays default - In your place I would raise a formal complaint if you haven't already. From previous experience with clients, these things can take an awfully long time to resolve so you want them to take it seriously.

Good luck!

Fizz_Bomb said:

Hi all, 

Looking for some advice/reassurances re our current complicated situation…

my partner and I have been saving hard for a few years and have just, via a broker, began the rollercoaster of house/mortgage hunting. 

Background….I had to take out an IVA in jan 1017 after a divorce, which I settled in 2020 and it dropped off my account in jan 2023. However, a Barclays loan is still showing on my account as defaulted in jan 2018 despite it being included in IVA. I’ve raised this with Barclays and they have advised me it’s being dealt with. The default was for £4200. 

Other than that, I now have no debt, a steady, modest income, partner is self employed but also has a decent income with 2 years of accounts and we have a 15% deposit. He has excellent credit rating.  My credit rating, is actually quite good despite my history, although I know this stands for very little. 

A broker did a soft search the other day and we were outright declined, the broker citing my default as a reason and my previous Iva. 

He approached precise, who have given us an approved DIP, but with an eye watering interest rate of 6.1%.

For info, our deposit is 42k, house price 275. 

The broker has mentioned trying Halifax as they are apparently a more forgiving lender with blips?? but I’m worried about too many searches on our accounts.

my questions are really…

1/ how likely is it we’d be approved by either Halifax or precise?

2/ would my default from 5.5years ago really affect us this much? And should my Iva be affecting us given it was 6.5 years ago from start?

3/ what happens next now we have an approved DIP from precise? It says we must apply in 28 days or it’s invalid 

4/ is it worth approaching Halifax, is what the broker said true?

thank you in advance for any help or advice 

Fizz_Bomb

Thanks so much for taking the time to reply. The default is showing as satisfied. I spoke with Barclays Iva dept over phone and he assures me it’s being dealt with. I also emailed a copy of my Iva completion certificate to them again, but will certainly lodge the complaint if you think it’s worth a try. 

Do Halifax use a common sense approach as well? This is what the broker seemed to imply. 

K_S

Fizz_Bomb said:

Thanks so much for taking the time to reply. The default is showing as satisfied. I spoke with Barclays Iva dept over phone and he assures me it’s being dealt with. I also emailed a copy of my Iva completion certificate to them again, but will certainly lodge the complaint if you think it’s worth a try. 

Do Halifax use a common sense approach as well? This is what the broker seemed to imply. 

@fizz_bomb I wouldn't go so far as saying Halifax use common sense (like most other mainstream lenders, they apply a fairly rigid policy to minimise the need for manual interventions) but historically their credit-scoring has been kinder to applicants with adverse history when compared to other high-street lenders.

I'm sure your broker would've checked it out, but might be worth mentioning Accord cascade as well to them before plumping for Precise, that's a great product for high-LTVapplicants with historic adverse that a lot of brokers simply aren't fully aware of. I just recently got an Accord cascade offer at 90% LTV for clients with 4 satisfied defaults among them, all 4+ years old. Slightly higher than the mainstream Accord rate but much better than the specialist lenders or building societies that might consider the same credit profile.

Fizz_Bomb

Just an update, our broker has today done soft searches with Accord cascade and Halifax and both have declined. So it’s starting to look like it’s Precise or nothing for us. The broker seems to think my IVA is still impacting the application, despite it being over six years ago and the default of course as well. Given what I’ve read on here from others being accepted in situations apparently worse than mine, I’m really disheartened. 

K_S

Fizz_Bomb said:

Just an update, our broker has today done soft searches with Accord cascade and Halifax and both have declined. So it’s starting to look like it’s Precise or nothing for us. The broker seems to think my IVA is still impacting the application, despite it being over six years ago and the default of course as well. Given what I’ve read on here from others being accepted in situations apparently worse than mine, I’m really disheartened. 

@fizz_bomb Sorry to hear that. As I said earlier, no two cases are the same so you can't really compare your situation to another's.

Alternatively, if there is a chance that the Barclays default will be removed from the report because it should be have been registered more than 6 years ago, then it might be worth considering waiting for that to happen, be updated on the report and then try again.

Good luck, I hope you find a solution that works for you!