Need Mortgage / Credit rating advice

[kevpuk]

Try Noddle for a simple/free/limited startpoint......CheckMyFile is useful, too, but will cost you.....although there might be TCB/QuidCo - actually, there probably is on Experian/Equifax 'trial' too = free money, huzzah!

[Martin@AS Financial]

Two weeks ago I browsed the forums here and found that the only contractor friendly high street bank is Halifax. I used their online tool and got an agreement in principle for a mortgage with a 10% deposit. I then scheduled an appointment with a credit consultant in one of their branches. The branch was very busy and he could only see me today.

Today I gave the consultant the same details I used previously online and Halifax system came with an agreement in principle with minimum 15% deposit. This is my first mortgage application and I made a lot of mistakes. I didn't mention to the consultant I already had an agreement. In the last two weeks I changed my home broadband and my business mobile to BT, who did two credit checks. I guess the 3 credit checks in the last 2 weeks are the reason for the 15% deposit.

My problem is I found a house I really like for sale. The owner is moving to Australia and he'll accept the best offer he gets by 18th of August. Once I get paid in early August I'll have enough to make the 10% deposit and pay £4000 in different fees. There's no way I'll have 15% in time.

Do you think 5 weeks will be enough for the credit check to "cool down" and revert to 10%?

I strongly advise that the first thing you do is download your credit report and find out why your score has dropped so sharply. 9 times out of 10 you will be able to see where the problem lies straight away:

Free Credit Check, Credit Report and Credit Score from Experian UK

You are 100% correct in that too many scores have an adverse effect and this could well be the reason.

More often than not though, it is because a bank struggles to find your information. Ask the adviser to make sure that your address is entered line for line as per your experian report as this makes a real difference.

Lastly, did you declare all your outstanding credit as of the day that you applied. Bear in mind that credit agencies take a while to update so if you paid off your card a few days ago, it may not yet have been recorded.

The Halifax system is pretty intelligent and if it is not declared, the balance will be taken into account when calculating affordability. This may well have led to the reduced loan size.

[jamesbrown]

they only really used it as an identity check

In that case, they should make a soft footprint, which wouldn't be visible to other lenders (I'm not saying they do, just that a credit check isn't logical, only an identity check/admin review).

[centurian]

Do you think 5 weeks will be enough for the credit check to "cool down" and revert to 10%?

No chance - *if* it is down to excessive searches then at least 6 months to "cool down" - and 12 months to be completely "fixed" - assuming no further searches are made.

[centurian]

I'll bet your credit rating isn't the reason for the difference.

Three credit checks in a year, even for noddy stuff (Sky, Gym membership, mobile phone) is enough to cause you to fall outside the automatic algorithms which would otherwise give a straight out yes.

Would this - on it's own, cause a higher deposit - possibly not, but it can easily push it over the line if there are any other flags.

It's bonkers, I know - but that's how the system works - the credit checks don't record whether you are applying for £50 credit or £50,000, or even if you were just curious to get a quote, so lenders assume the worst.

People don't realise the damage that gets done to their credit rating just for applying for things you don't normally equate to credit.

I wanted to get a data SIM on a pay 1-month rolling contract. There is no "credit" as such, because you get cut off at the end of the month when you run out of allowance, or don't pay the next bill. However, the phone provider said they would still do a full credit search. Even worse, the sales assistant said that they didn't bother to evaluate the credit score that come back - they only really used it as an identity check - I think he said that because he thought I would have a bad credit score, so was looking to "re-assure" me to get the sale. He had no concept of the damage they were doing to people's credit files, when they were not actually extending any credit facilities.

[MicrosoftBob]

Talk to your accountant, ask what reserves are in your company you could draw out as dividends

You might have more money that you expect

[sal]

What is worrying is that you don't even have the 10% deposit and hope to secure it with future income, yet you want to convince the lender you can safely repay the mortgage during the next 10+ years. Are you using Umbrella or ltd?

[TheFaQQer]

What's a mortgage? INKSPE

Dim

[northernladuk]

While they're excellent the mortgage brokers do charge a fee (as they're independents) if Ender is concerned about finances that might be an issue. That being said the money a good broker will probably save will be worth it. It's certainly worth talking to the contractor brokers, they can work quite quickly and expedite things which the bank branch staff can't and have access to many products not available elsewhere.

The 10% on the web offer may well not have been anything other than an indication.

Indeed they do but for the cost of that fee the OP could lose the house he wants....

[TykeMerc]

Well for one the Halifax isn't the only contractor friendly lender and secondly why didn't you got to a contractor mortgage specialist? There are a number that post directly on here and plenty of posts comparing them.

I'll bet your credit rating isn't the reason for the difference.

While they're excellent the mortgage brokers do charge a fee (as they're independents) if Ender is concerned about finances that might be an issue. That being said the money a good broker will probably save will be worth it. It's certainly worth talking to the contractor brokers, they can work quite quickly and expedite things which the bank branch staff can't and have access to many products not available elsewhere.

The 10% on the web offer may well not have been anything other than an indication.

[TheLordDave]

If there was any credit issues they would want a minimum of 20%. As I have found recently.

[northernladuk]

Well for one the Halifax isn't the only contractor friendly lender and secondly why didn't you got to a contractor mortgage specialist? There are a number that post directly on here and plenty of posts comparing them.

I'll bet your credit rating isn't the reason for the difference.

[Ender]

Two weeks ago I browsed the forums here and found that the only contractor friendly high street bank is Halifax. I used their online tool and got an agreement in principle for a mortgage with a 10% deposit. I then scheduled an appointment with a credit consultant in one of their branches. The branch was very busy and he could only see me today.

Today I gave the consultant the same details I used previously online and Halifax system came with an agreement in principle with minimum 15% deposit. This is my first mortgage application and I made a lot of mistakes. I didn't mention to the consultant I already had an agreement. In the last two weeks I changed my home broadband and my business mobile to BT, who did two credit checks. I guess the 3 credit checks in the last 2 weeks are the reason for the 15% deposit.

My problem is I found a house I really like for sale. The owner is moving to Australia and he'll accept the best offer he gets by 18th of August. Once I get paid in early August I'll have enough to make the 10% deposit and pay £4000 in different fees. There's no way I'll have 15% in time.

Do you think 5 weeks will be enough for the credit check to "cool down" and revert to 10%?