Halifax Credit Scoring Above 85% LTV

LokumEnjoyer

Hi all,

We're FTBs with fairly specific circumstances, looking at shared ownership properties in England. We are hoping to do 95% LTV, which I recognise is very optimistic in our circumstances.

We've received an AIP from Halifax, with a maximum loan of more than twice what we need but capped at 85% LTV. Halifax are the only lender available to us at 95% LTV due to our immigration status (no ILR, less than 12 months on visas, and I have more than 5 years of UK residency).

My partner has 4 years of unblemished UK credit history. I have a few snags:

• O2 default, £1,000 registered Feb 2020, settled in full Jan 2024
• Went 30/60 days late on Vodafone bill in late 2020, no issues for 2.5 years thereafter
• Unarranged Lloyds OD due to bank fees in Jan/Feb 2023, no issue for 1 year thereafter before closure
• Currently £1,500/£2,000 into interest free student overdraft with Co-op Bank, haven't touched this as it won't be repayable for another couple years

Neither of us are on the electoral roll due to ineligibility. This has made it difficult to access credit in the past.

I have a credit card we pay off in full, partner has only been clearing 80% of the balance on her primary card for past couple months due to an expensive summer. She also has a Halifax credit card in a long interest free period. She also has a personal loan of approx. £1,000 outstanding, a a small interest-free furniture loan with less than £400 outstanding.

We went all in with Halifax a couple years ago in the hopes this would get us somewhere. HP loan, primary current account, contents insurance, and the credit card.

We were hoping to entirely cut our credit card spending and settle the overdraft before applying, but a very promising property which ticks all the boxes recently went on the market which has prompted us to speed things up by a few months. Still need to confirm some things about it but it's a rare resale in a completed estate that we love.

If the default was going to be a determinative factor, I'd think it'd result in a decline rather than a low LTV accept. We're wondering if there's anything we can do before it falls off my report which may let us get approved at a higher LTV? Perhaps settling the overdraft? 

We've also considered putting a notice of correction on our reports re electoral roll. I understand this normally means automated lending decisions cannot proceed without underwriter review, although I'm not sure if this applies to AIPs. I don't think the electoral roll is actually a factor here, but given the age of the default and our good affordability I wonder if this could get us around the "computer says no" problem.

What exactly are the factors in the "enhanced credit scoring" Halifax undertakes above 85% LTV?

(To preface other advice, we'd ideally like to get the mortgage in place before visa renewal to allow us to borrow for this if needed. Unfortunately, the default won't fall off my report until after we renew which leaves us a bit stuck. I'm aware that if we wait we'll have a few more lenders like Principality and Darlington at 95% LTV and things will be otherwise much easier! We are looking around for brokers but that's somewhat daunting given our unusual circumstances... I had to explain Halifax's foreign national lending criteria to the first one we tried which has left a bad taste in our mouths!)

Thanks in advance for anyone's input.

la531983

LokumEnjoyer said:

Neither of us are on the electoral roll due to ineligibility. 

Ineligibility in what way? You can still be on the roll, you just have your name crossed out on the roll for specific elections.

LokumEnjoyer

la531983 said:

LokumEnjoyer said:

Neither of us are on the electoral roll due to ineligibility. 

Ineligibility in what way? You can still be on the roll, you just have your name crossed out on the roll for specific elections.

We’re fully ineligible as we live in England and aren’t British or Irish. You can try yourself on Gov.UK, the form will not let you proceed as there are zero elections you can vote in. We also fill out the registration form from the council each time it comes but have never been placed on the roll for the same reason. It’s different in Wales and Scotland.

It’s a recurrent issue for immigrants in England/NI as some CRAs such as Equifax tend to auto-decline if you’re not on the roll. I’ve been rejected for a SIM-only contract and approved for a mobile phone on the same day simply because of the CRA used.

LokumEnjoyer

LokumEnjoyer said:

la531983 said:

LokumEnjoyer said:

Neither of us are on the electoral roll due to ineligibility. 

Ineligibility in what way? You can still be on the roll, you just have your name crossed out on the roll for specific elections.

We’re fully ineligible as we live in England and aren’t British or Irish. You can try yourself on Gov.UK, the form will not let you proceed as there are zero elections you can vote in. We also fill out the registration form from the council each time it comes but have never been placed on the roll for the same reason. It’s different in Wales and Scotland.

It’s a recurrent issue for immigrants in England/NI as some CRAs such as Equifax tend to auto-decline if you’re not on the roll. I’ve been rejected for a SIM-only contract and approved for a mobile phone on the same day simply because of the CRA used.

*British, Irish, European, or Commonwealth I should say. You throw some tea into Boston Harbour one time and they never let you live it down...

kingstreet

Frankly, I think you've done well to get 85% offered at DIP. Although the default is historic and the unauthorised borrowing from Halifax's parent is also ageing, it's still visible.

Since the mortgage guarantee scheme ended last month, lenders are looking even more for squeaky clean/no adverse and strong residential and employment histories for 95%. IMHO scoring has always been a bit more stringent for schemes such as HTB and SO.

LokumEnjoyer

kingstreet said:

Frankly, I think you've done well to get 85% offered at DIP. Although the default is historic and the unauthorised borrowing from Halifax's parent is also ageing, it's still visible.

Since the mortgage guarantee scheme ended last month, lenders are looking even more for squeaky clean/no adverse and strong residential and employment histories for 95%. IMHO scoring has always been a bit more stringent for schemes such as HTB and SO.

Yes, I was wondering to what extent the guarantee scheme ending/being reinstated after a short gap would affect things, but the scheme rules seem to exclude SO mortgages so I wasn't sure if it'd have an impact. I suppose it would've prompted a review of creditworthiness across the board in any event.

We're undoubtedly fortunate to have gotten accepted in the first place, but I've always been one to try and push my luck! If nothing else, I suppose it's a good indication we likely won't have too many issues trying again later if it comes to that.

ACG

When did you do your research? 
There is a lender who announced some changes to their criteria earlier this week who I think may go up to 95% for your situation (albeit with higher rates). 

Have you spoken to a broker? It might be worth getting a second opinion. 

LokumEnjoyer

ACG said:

When did you do your research? 
There is a lender who announced some changes to their criteria earlier this week who I think may go up to 95% for your situation (albeit with higher rates). 

Have you spoken to a broker? It might be worth getting a second opinion. 

I made a shortlist around a year ago by going through the top lenders by volume per UK Finance and checking the non-UK national lending criteria for every listed residential lender (probably about 50 or so), really just as an exercise to see if it'd be viable at a high LTV before getting permanent residency more than anything.

We'll redouble our efforts to broker hunt. The only one we've spoken to so far wasn't overly familiar with non-UK national criteria and said if Halifax wouldn't lend at our desired LTV he had no other options for us. Rates aren't a concern for us; we are only wishing to fix for 2 years or so as we'll be in a much better position re credit/income by that point. Thanks so much for the ray of hope!

ACG

You sound like a mortgage broker haha.