Who am I most likely to be accepted a loan from?

FirstTimeBuyerRenovation · 12 October 2017 at 6:47PM

Okay, so I've finally managed to purchase my new home. The exchange of contracts went ahead today, and completion is set for tomorrow when I can go pick up the keys.

Now, after taking this out on a mortgage, I'm not entirely sure I'd even be accepted for a loan, or if I'd be offered anything near representative APR.

I'm looking for realistically 15K, and I'm wanting it over 10 years. At representative rates, that'll be around £150 a month, which is more than comfortable.

Anyway, to the point. I currently have a First Direct current account, problem with that is they offer a maximum of 7 years.

I've taken my mortgage with Natwest, they offer loans of over 7.5K over 10 years. I'd have to switch my current account to them though.

And finally, the only other 'reputable' company I can see that offer 10+ years is Tesco Bank.

1 - Who am I most likely to be accepted by?
2 - Anyone else that offer 10+ years?
3 - If I opted for Natwest, does anyone know if I can apply now and move my current account to them, or would I need to bring my account over first, which'd take a couple weeks and then apply?

[Deleted User] · 12 October 2017 at 6:53PM

Not nearly enough information to say. What sort of credit history do you have? What do you earn?

You may be unlikely to be able to get anything immediately, given the recent mortgage.

Try an eligibility checker after a couple of months. Make sure you get on the ER ASAP.

FirstTimeBuyerRenovation · 12 October 2017 at 7:22PM

I'm not pinning all my hopes on this to be honest. I was declined by a few providers for a mortgage.
So I can't say my credit file is great. That said, I wasn't given any particular reason that they declined.
I've got one late payment (which, I believe was unfair, but the financial ombudsmen sided with them).
I have about 2.8K on a credit card, if I was to get a loan I'd be planning on clearing this and using what was left on the house.

I do have a Very account (who I got the late payment from), I've got no debt to them, but it's showing I have 3K available to me. I don't actually want this, I was planning to cancel this. But it'd have bumped my credit utilisation up, I've not cancelled it just in case Natwest changed there mind about the mortgage. Would I be better of cancelling this now, baring in mind the loan? At the moment I'm utilising 2,800, out of 6,500. If I cancelled it it'd be 2,800 out of 3,500.

That's basically my credit history, I'm 27, I've had a few mobile contracts, a loan (well over 6 years ago), and some finance in the past (don't think any of them show on my credit history mind).

I'm hoping to apply ASAP, I won't actually be living in the property until it's at least got a new kitchen, bathrooms not too bad, the rest is really dated (20-30 years, and half a***** painting), I could clean that up and throw some paint up, if I failed to get a loan.

I'll be sorting everything out as soon as I get the keys. Been living at my parents property all my life, so I've been on the ER here since birth (or, well since I was 18 I guess). So I believe I can still apply for a mortgage whilst living at my parents?

With regards to what I'm earning. Difficult to say, maybe one reason I was declined with some mortgage lenders. My contract is a 25 hour contract, but I don't actually do that. Lowest I've done is 35. Average around 42, and most I've done is about 50.

I've actually just had a payrise after doing my first year at that job, gone from £11.30 an hour to £12.77. So if I'm averaging 42 hours, that'd be 27-28K a year. I'm doing this on my own. Nobody else will be living here.

Like I say, I'm not too sure whether I'd get a loan at all, I'm prepared that. But, I'm hoping to apply for one atleast tomorrow. Just wondering if I'm best going with my bank, mortgage provider, or will it make a difference?).

[Deleted User] · 12 October 2017 at 7:30PM

Recent mortgage, missed payment, high utilisation, lots of recent searches and a low income in relation to your borrowing requirement - doesn't look good.

I'd suggest when the time does come to apply - and I would leave it at least three months - go for a much more modest amount - eg 5k. I can't see you getting 60% or more of your income as a loan.

FirstTimeBuyerRenovation · 12 October 2017 at 7:55PM

Any advice on what to do with the Very account?
Didn't even want it in the first place if I'm honest. They were offering 25% off for new customers, so I figured I'd sign up at the time and pay the balance off in full. Which I did. They'd didn't provide a receipt until the following day though, and I missed the delivery charges. £3 late payment. I'm a bit bitter about it to be honest. Anyway, I'm not going to use it again, ever.

Makes sense to cancel it, but like I say my credit utilisation will jump from 2,800/7,500 (43%) to 2,800/3,500 (80%). So I'm not too sure if by cancelling it, I'd actually adversely affect my credit file.

[Deleted User] · 12 October 2017 at 7:56PM

It's only use is in stopping your utilisation rising higher.

Keep it until you can get a card with a decent limit, or reduce your existing debt.

Candyapple · 13 October 2017 at 10:08AM

FirstTimeBuyerRenovation wrote: »

1 - Who am I most likely to be accepted by?
2 - Anyone else that offer 10+ years?
3 - If I opted for Natwest, does anyone know if I can apply now and move my current account to them, or would I need to bring my account over first, which'd take a couple weeks and then apply?

1. Your acceptance depends on your credit history.

2. Lenders who do loans for 10 years that I can find are Natwest, RBS and Tesco.

3. Why move your main current account if you don't want to? If you were intent on applying with Natwest then just open up a new current account with them. It seems that in order to apply for one of their loans that you need to have a current account first, so you'd need to open a bank account and then when that's set up apply for the loan.

It seems a bit counter productive to be honest because then it's another hard credit search to be added along with the hard search for when you apply for their loan.

Have you thought about going for a lower amount over a shorter term? Firstly you open the market to near enough all lenders and second you pay less interest. As an example, if you went for £10k over 7 years the representative APR is 3.1% and the monthly repayments would be £132.

How old is the late payment marker from Very?

Personally given that you've just got a mortgage and your credit history is only average, you'd be better off following these steps below:

Apply for a 0% money transfer card (MBNA are known for giving high limits).
https://creditcards.moneysavingexpert.com/?money-transfers&_ga=2.198472103.983962818.1507628140-160981962.1507628140
Pay off the £2.8k on the other card then close that too.
Check all 3 of your credit files to see what is on them.
Experian: https://www.moneysavingexpert.com/creditclub
Equifax: https://www.clearscore.com
Call Credit: https://www.noddle.co.uk
Register to be on the electoral roll at your new house.
Close Very account.
Use whatever limit you have left on the money transfer card to withdraw to your bank account and pay for whatever you need doing to the house.
Save as much money as you can as well in the meantime.
Wait 6 months and see how your credit files are looking.
Use eligibility checker to see what your chances are of getting a loan.
https://www.moneysavingexpert.com/eligibility/loans-calculator/

DebtFreeDuo · 14 October 2017 at 12:37PM

With Natwest you can check your eligibility before actually applying so it doesn't show up as a search, not sure if you have to be a customer first to do this I just know you can as I have used it previously.

Who am I most likely to be accepted a loan from?

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