Late Payments & Pay Day loans dont go well when conisdering applying for a mortgage so here is a Late Payments & Pay Day loans Mortgage Success Story.
This Success story is quite tame compared to some of the cases we see, but at the same time the applicants had been to another broker and been declined, only to be told they could not be helped, so it is a nice story to show that one person saying you can not get a Mortgage does not make it true.
The situation
The customers had various late payments scattered about on their credit report over the last few years, nothing too serious but they were looking for a 95% LTV mortgage. At 95% LTV lenders on the high street tend to be quite harsh when scoring applications and with the number of late payments, although relatively mild in the grand scheme of things, the case was always going to struggle to pass on the credit scoring on the high street.
Added to the late payments, there was also some historic use of Pay day loans, that can rule out some lenders if they see you have ever had a pay day loan so it does restrict our options.
The customers went to see another broker before ourselves and that broker applied for a Decision in Principle which was declined. The broker then came back and in effect said that they can not help and would not be able to get a mortgage for at least 6 months.
The customer did not want to give up just yet and sent us a message through our website.
What we did
Like every case we get, the first thing we do is to talk through the situation and determine if it is something we can help with or not. If on the face of it everything seems feasible then we obtain a copy of the credit reports and then talk it through with some of our Account Managers, this case was no different.
It became apparent that we were unlikely to get this through on the high street and so we then had to look at some of our manual underwriting lenders. The rate was broadly in line with the high street, less than 0.5% higher, so nothing significant in the grand scheme of things.
Within the month we had a Mortgage offer issued at a rate of around 3.1% fixed for 2 years.
Not only did we get them a Mortgage when someone (another mortgage broker) told them it can not be done, we also managed it on the first application and at pretty good rates for a 5% deposit.
Overview
After nearly 10 years doing this, we have a process that works.
So if you have had Late Payments & Pay Day loans and are thinking “can i get a mortgage with bad credit” try not to worry, as there could still be a Mortgage Success Story waiting for you.
Unlike many brokers who are generalists, we tend to specialise in the Bad Credit market, that means we are used to seeing everything from a few late payments to 10 Defaults or Bankruptcy and Debt Management Plans. As we are talking through your situation, we are already drawing up a short list of options in our head and that is why we can usually give an indication of rates on the initial phone call more often than not.
Regardless of what you have been told by others, give us a call. Worst case scenario we can not help, best case you end up with the keys to your new home.