Joint Mortgage Application with Payday Loans

Sjamies

Hello.

Would really appreciate some advice from those who have had a joint mortgage application accepted where one party of a joint mortgage application has payday loans on their credit file. Especially from the mortgage broker members.

In short, my partner and I have had an offer accepted on a property, £845k offer accepted. We have a £220k deposit, so mortgage amount is around £625k and LTV around 75%.

I shamefully took out a series of payday loans spanning 3 years due to loss of income and personal debt between 2018 and 2021. All repaid in full and on time. Last PDL was Feb 2021, so over 2 years ago. Total of 10 PDL's.

I since have zero debt, a perfect credit score & payment history, and a very good salary (£82k).

My partner has a perfect credit score, and a phenomenal salary of £200k, so combined salary is around £280k p.a. for a mortgage amount of around £625k.

We have a mortgage in principle with a mortgage broker for up to £1.7m which is way over what we need to actually borrow.

My question is, given our favourable buying position in terms of excellent credit scores, no debt, combined income of £280k, are lenders likely to decline our mortgage application based solely on my 10 PDL's that were settled over 2 years ago?

I am bricking it a bit as I fear our dream house and mortgage for it could be declined based on my stupid PDL's from a couple of years ago, so would really appreciate personal experiences and feedback from mortgage advisors who might be able to offer advise.

Thank you

born_again

If they were a issue you would not have got a mortgage in principle, unless they were never declared.

Sjamies

@born_again yes that's true, but we were given a mortgage in principle based on the fact that I have not had any PDL's in the last 2 years. Which is completely true. My concerns is the underwriting process which will raise these PDL's from 3-5 years ago and potentially be grounds to decline a mortgage application. Which is why I am asking for similar experiences and guidance from mortgage brokers.

born_again

A lot will depend on who the actual lender is.

ACG

I think you will be fine with 99% of lenders. You could pick a lender at random and you would be incredibly unlucky to get declined based on that alone. 

They are over 2 years old, you are not in the cycle that is usually associated with PDLs anymore. 

mdj1876

I recently secured a 90% LTV with settled payday loans 2 years before I applied for my mortgage. 

I was accepted by a mainstream lender for the lowest rate on the market at the time. I can't see you having any issues whatsoever. 

Some lenders will decline you for ever having payday loans, some will accept them as long as it was 12 months ago - check the lending criteria to be sure.