Halifax Mortgage Promise - confused!

tygar2 · 5 February 2017 at 10:39PM

Hello everyone.

Around 2011/2012 I defaulted on lot of credit agreements totalling over 20k. These are all still on my credit report and a number are showing as unsettled as the debt collectors dropped them when challenged for CCAs etc. Basically my credit file is a bomb site but I have no CCJs. last I checked Experian scored me 328 - Very Poor - useless score but am just trying to paint a picture.

Have since got married and we have been saving with a goal of attempting a house purchase sometime in 2018. With this in mind we made an appointment with the local Halifax branch mortgage advisor. The purpose was to just get some information on what will be needed when the time comes so we can prepare.

The advisor started his process and I stopped him explaining that my credit file was a complete no go so would fail plus all we wanted was general info. I also did not want to become financially linked to my spouse because of it. He assured me that it was a soft search to ascertain what would be available to use and no financial link would happen until we actually took a mortgage out together. He said something to the effect that "sometimes scores balance each other out" - no clue what that means. I let him go ahead.

Anyway, the shock, and reason of this thread, was the system apparently did a credit check and gave us a mortgage promise. How is this possible? I was upfront about my credit issues and saw the advisor tick boxes to that effect when processing my details. I have lived at my current address for nearly 2 years and my previous address for 7 years before that. All defaults were at my previous address and it was entered in the system.
We have help to buy ISAs with the Halifax and have saved enough for a deposit and fees. We have no ongoing loans, HPAs or store cards. We have a credit card each and this is paid off in full every month. The amount offered appears to be approximately 4x our combined total gross income.

Not sure what to do now as I am very sceptical about what happened - system error? Look for a house or don't bother? Hope someone in the know can advise.

Thanks

streetlovin · 6 February 2017 at 12:26AM

Mortgage Promise/Agreement in Principle only suggests the maximum amount that they can lend you based on a soft credit check and few details you've provided. I think people mainly use this to prove to sellers that they are serious buyer. So yeah, it is not surprising that they could provide it to you..

This amount can change when you make full application. Hard check will dig more details of your credit history and this will be taken into account when they decide whether to lend you. This will also depend on the amount of deposit you have, the type of properties, any HTP scheme that you use....

My advise would be to get a really good broker, not a fee free one because those ones won't really argue for your case...independent brokers will be able to advise on lenders that are more accepting of people with bad credit history.

But I am no expert.

Richey_ · 6 February 2017 at 1:11AM

Or just study Halifax lending criteria and see if you fit it. Will save money which can be put to the deposit. The mortgage adviser sounded positive, good luck hope it works out!

cahillg81 · 6 February 2017 at 3:37AM

Halifax DIP fairly reliable, likely when you do a full app it will refer for an underwriter to review but so long as you disclose everything it should be fine. Get a full experian report and make sure everything on there is disclosed.

ap1985 · 6 February 2017 at 12:57PM

I got a mortgage offer though Halifax even though my credit report was shambles...however, my defaults were due to be dropped off. But Halifax are more lenient then other lenders. But I would also highly recommend going through a broker and this really helped my case.

ellison007 · 6 February 2017 at 1:19PM

Well done ap1985 on receiving a mortgage offer through Halifax; I have a 'mortgage promise' via Halifax at the moment & will more than likely do a full app with them soon.

just out of interest, which CRA's did they check at the full app stage? For my DIP they looked at Experian and Call Credit but not Equifax.

Verix · 6 February 2017 at 2:25PM

Halifax have no set policy on things like defaults, so will often pass at inital credit scoring. At full application they will probably ask for a good reason as to why you got in to financial difficulties

streetlovin wrote: »

My advise would be to get a really good broker, not a fee free one because those ones won't really argue for your case...
.

Just out of interest what is the logic behind this statement? A fee free broker will only get paid if they can arrange a mortgage (from the procuration fee from the lender. A broker who charges a non-refundable fee up front gets payment whether you get a mortgage or not and so (I would argue) is less incentivised to fight a case).

Ultimately I would be disappointed if any broker would be willing to throw in the towel after one knockback from a lender.

streetlovin · 6 February 2017 at 5:16PM

I can only speak from my experience. Fee free brokers care about quantity rather than quality. They want easy case that gets them commission. It is like Recruitment Consultant...they don't care about you. You don't pay them. You are one of their many bullets and if you miss they move onto someone else.

And yes, I would be disappointed too if my broker just gives up after come knockback...and morally it is really low. But what can you do, it is their business... Don't get me wrong i use fee free brokers to reduce costs but I also know I get what I paid for.

tygar2 · 20 February 2017 at 6:16PM

ap1985 wrote: »

I got a mortgage offer though Halifax even though my credit report was shambles...however, my defaults were due to be dropped off. But Halifax are more lenient then other lenders. But I would also highly recommend going through a broker and this really helped my case.

Congratulations ap1985!

As your situation sounds similar to mine can you please clarify something for me? Did you get your mortgage with the Halifax via the broker or did you go direct like I did. If via the broker (as I think you are said) then what advantage did that give you if you get what I mean?

thanks

tygar2 · 20 February 2017 at 6:17PM

ellison007 wrote: »

Well done ap1985 on receiving a mortgage offer through Halifax; I have a 'mortgage promise' via Halifax at the moment & will more than likely do a full app with them soon.

just out of interest, which CRA's did they check at the full app stage? For my DIP they looked at Experian and Call Credit but not Equifax.

Same here, they do not appear to have searched on Equifax (am currently signed up for a free trial).

tygar2 · 20 February 2017 at 6:21PM

streetlovin wrote: »

I can only speak from my experience. Fee free brokers care about quantity rather than quality. They want easy case that gets them commission. It is like Recruitment Consultant...they don't care about you. You don't pay them. You are one of their many bullets and if you miss they move onto someone else.

And yes, I would be disappointed too if my broker just gives up after come knockback...and morally it is really low. But what can you do, it is their business... Don't get me wrong i use fee free brokers to reduce costs but I also know I get what I paid for.

In my situation where the Halifax has given an agreement in principle (I admitted upfront about my credit file and saw advisor select the relevant boxes when processing) do you guys suggest I still go and find a broker? If so, why?

Thanks all

Halifax Mortgage Promise - confused!

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