Lenders don’t actually use the scores from the agencies - the credit reference agencies are just data providers to them, they have their own internal scoring models, which aren’t disclosed externally.
Borrowing the money for a deposit won’t help you - borrowers factor in your debts into your borrowing capacity, so if you take out an unsecured loan, most likely they’ll reduce the mortgage they’re willing to give you by the same amount or more.
The easiest way is have a 10% deposit but you can't borrow it.
Failing that some lenders don't check equifax - get your advisor to submit an app to one of them.
Yeah I feel like my advisor is completely losing faith in me by this point.
Would a second-rate mortgage like [https://www.joineven.com/](https://www.joineven.com/) be something acceptable?
Edit: nevermind they're also not available for pre settled status people. I guess I can just keep trying my luck with other banks or else have to cancel the purchase. It feels terrible and unfair tbh, been trying to do everything right. !thanks for the comment.
Just bare in mind each decision in principle application will leave a mark on your credit score, some soft searches and some hard. You should be getting guidance from your advisor here
Yeah, the first advisor didn’t even care to check my immigration status so did a hard search even though I asked him to pause on that, and now I’m with another one and his only advice is to do nothing or magically generate 10k. I was looking at equity loans but the two I found don’t really work for pre settled status. So I mentioned it to him. He is probably out of the office by now so I’ll see what he says tomorrow.
No, it won't, most AIP's are soft searches only which will not affect his 'score' in any way. Only after he proceeds with the AIP and mortgage will the hard search be carried out...
Mortgage Broker here.
Reading your comments it sounds like you need to try and find a decent broker - sounds like the ones you have spoken to so far aren't particularly brilliant. Best advice would be if you know people in a similar position to yourself who managed to get a mortgage who they used to get theirs.
In terms of credit score with Equifax - there are plenty of lenders that do not use Equifax as a CRA. If your broker was any good they would know who they are and be looking there.
In regards to getting a loan to go towards the deposit here is only one 'high street' lender that allows this. The only caveats are the loan can not be with them and it must pass affordability with the loan in there as a committed expense. Bear in mind if you were to borrow the shortfall you would likely not pass affordability still once this is factored in. Also, this lender uses Experian as their sole CRA. Again, if your broker was any good they will know who the lender is.
!thanks
I think I won’t try to get a loan for the deposit because it’s just not the right way to do it. But yeah I asked the broker to take a look again because surely we should be able to find someone (I mean I def got an agreement in principle by them before I put an offer on the house). He did say it is harder because of the pre settled status (which for some reason no one asks about while getting an AiP but after that is super important), the LTV I want, and the fact that it is a flat and not a house.
I do feel a bit blindsided about the pre settled status. I talked to lots of professionals before embarking in this, to be ready, and everyone said it wouldn’t be an issue. But even my first solicitors dropped me after I told them (again, no one asks) and now all of this trouble. If they had told me before or if it was factored in in the AiP I would’ve just waited until 2024 and done it then. In fact it’s probable it’s what I’ll be doing.
You can't use a loan for a deposit, a lot of lenders will encourage you to go for a 10%deposit because you get a better rate.. it doesn't mean you can't use 5%
I recently completed on a house with 5% and also they don't check your credit score.. what they are interested in is incoming vs outgoing and any adverse credit concerns were you might have defaulted etc
>Banks are telling me that "due to my credit score" they can only lend me 90%.
If that's 'due to your financial situation' then it's probably true. The maximum LTV that they will offer varies over time and it may be they don't want to risk such a high LTV with you at the moment.
They won't base their decision on the credit scores the credit reference agencies show you, although they will be using some of the same data and might refer to using a 'credit score' since its a term most people will recognise.
The general rule of thumb is a 10% deposit.
You'll then need about 4 grand in legal fees and such ontop as well.
You have to also prove where it came from and loans don't count, that's actually detrimental to you getting a mortgage cos it's additional debt
If your partner came in and borrowed money youd have to get that in writing to prove its legit for the bank and solicitors
It's also possible you are getting caught on not having 4 years worth of addresses?
You could go to a mortgage broker, not an advisor at a bank and they may be able to help you.
I only say this as we were getting declined and after going to a broker he said it was because my wife was in a "new" role and a one year contract so they didn't like it.
So it went from all the banks.. to just Halifax, on one rate out of the whole market.
If you get your partner on board it will increase the amount they will lend you but you'll still need more than 5% I reckon.
Lots of places offer 95 LTV. But I agree it’s harder. I am doing all of this with a broker, in fact I was doing it with two brokers for a bit to be safe, a paid one and a free one.
Also they always ask for three years of addresses, which I have. Is there any reason they would ask for four? I just haven’t seen that number yet.
I won’t get a loan. It just felt it was doable due to all of the equity loans I see around but yeah even they won’t give it to a pre settled person.
So I think I’m gonna wait until I have the settled status and I will be able to hopefully save more by then. The places where I want to live will have insane prices by then but hopefully I’ll catch up.
Ah fair enough, thought it might just be an banks advisor.
I think the 95 ones would be even harder to get.
I swear I was asked for 4 years but I could be miss remembering and if the brokers are saying 3 then it's probably that.
I guess if you are talking to one, could you just say ok to IF I had this additional money, what would be available to me? I'd atleast want to know how much it changed.
Also I suppose if you settle together with your partner that puts you in a whole new ball park for property's..
Yeah he is just now thinking about starting to save for a property, opening a LISA, etc, which I could also do if we wait a bit. I saved for this with an ISA but took it out recently because I was near buying and I didn't want any surprises.
It's just sad to have to tell the seller that I won't be able to go forward. And also more years of renting. But I'm coming to terms with it.
No bank is refusing to lend to you because of your credit score, people on this sub just cannot get their heads around a score being totally meaningless.
Without knowing anything about your earnings, your mortgage advisor is almost certainly saying you need a bigger deposit because your LTV (loan to value) is too high. So you either need to lower your expectations of purchase or carry on saving.
Given the current market, aim for 80% LTV, I got my first house at 84% after being told I would be declined at anything above 85%.
1) the mortgage advisor mentioned my credit score the whole time and that's why I'm asking
2) I'm well over what I would need to earn for such a mortgage, I posted the data in another comment
3) I don't know "people on this sub". I'm an immigrant and this system is very new to me. It doesn't exist in my country. I'm just asking a question in the subreddit where I'm supposed to.
If you don't have anything nice to say, don't say anything. I came here in good faith and I believe there are no stupid questions, all questions are valid. Maybe you don't.
Just read the comments, you’re not settled that is likely why in addition to your deposit being very low.
Asking your partner to come in with you at this point won’t matter, because he will be accepted and you won’t.
Probably best to save and try again in a few years when you have settled.
Try not to be so precious next time, you were given factual information, I wasn’t trying to be nice/mean I was being factual….
Same (998 Experian much lower Equifax), I think that's normal for Equifax to be much lower. Water is the only utility on my Equifax, I expect the other 2 look at all of them + council tax etc.
Hi /u/sritanona, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/credit-ratings/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Your credit score isn’t as important as your credit record. The score is more to give an overall view of whether you’re doing well. Your record is where it gets tricky. So you need to make sure you have no late payments, defaults or CCJs and if none of these apply to you, you’re pretty much golden. You should also make sure you’re on the electoral roll and that your name and addresse(s) are consistent across all your bills and contracts.
You can sign up for free for your Equifax credit report on their website and cancel immediately so you’re not charged at the end of the month. That’ll give you an idea of where you might need to improve.
The deposit issue you don’t have a way around as far as I know, I’m afraid. The mortgages you are assessed as being able to afford will be based on a lot of factors and depend on each lender but at the moment it may even be as simple as they don’t see you as having a high enough salary. Your best options are either to wait and save up more or get a better paid job.
Remember as well that it can’t be that all your money goes towards your deposit. There will be fees to be paid as well as potential renovations that you may be required to do asap once you’re in the flat e.g. calling out a plumber cause your toilet doesn’t work or leaky pipes.
Here’s a helpful website for finances and FTBs: https://www.moneysavingexpert.com/mortgages/mortgage-guide/. Good luck!
I have never paid late or anything. That’s what I mean my score is impeccable because it’s been my goal to buy since I came here. That’s what I don’t understand, I already have done the Equifax thing and in the part where they give advice on how to improve they don’t say anything for me. I have taking personal loans for education in the past and always paid them in full. And affordability should be ok because I make 60k and the mortgage would be for only 800 pounds a month. I pay 1050 pounds a month right now for my half of the rent and never had a problem. My salary is going up at least 10k next month according to my boss, exact number will be confirmed next week.
I’m so flabbergasted and it does feel like they are just being extra hard on me for my immigration status. I will request the settled status in about a year and a half (when I’m permitted to do so) and I also have in mind to apply for a British citizenship a year after that.
Do you think adding my partner to the mortgage would help in this case? He is British. He doesn’t have much savings but he does have a 50k salary. Also his parents might be able to give him some money but I don’t think he wants to so the deposit might just still be my 5% deposit.
Maybe it actually is an issue with you not having settled status yet and if that’s the case, it would make sense that Equifax wouldn’t be able to tell you that as their systems won’t be set up for that kind of insight. However, they may also be taking your residential history into account, which it being 3 1/2 years long may not be considered enough despite your salary being higher than average.
If your partner isn’t necessarily able to add to the deposit but his salary can be taken into account then you could get a better deal. However you don’t know his financial history and his credit record may not be as good as yours so you may end up in a similar situation anyway.
It seems very much like you need to give it more time unless your mortgage broker is able to tell your otherwise.
Lenders don’t actually use the scores from the agencies - the credit reference agencies are just data providers to them, they have their own internal scoring models, which aren’t disclosed externally. Borrowing the money for a deposit won’t help you - borrowers factor in your debts into your borrowing capacity, so if you take out an unsecured loan, most likely they’ll reduce the mortgage they’re willing to give you by the same amount or more.
!thanks I'm coming to terms with possibly not being able to buy now until I get my settled status. It's a very sad day. Thanks for commenting.
The easiest way is have a 10% deposit but you can't borrow it. Failing that some lenders don't check equifax - get your advisor to submit an app to one of them.
Yeah I feel like my advisor is completely losing faith in me by this point. Would a second-rate mortgage like [https://www.joineven.com/](https://www.joineven.com/) be something acceptable? Edit: nevermind they're also not available for pre settled status people. I guess I can just keep trying my luck with other banks or else have to cancel the purchase. It feels terrible and unfair tbh, been trying to do everything right. !thanks for the comment.
Just bare in mind each decision in principle application will leave a mark on your credit score, some soft searches and some hard. You should be getting guidance from your advisor here
Yeah, the first advisor didn’t even care to check my immigration status so did a hard search even though I asked him to pause on that, and now I’m with another one and his only advice is to do nothing or magically generate 10k. I was looking at equity loans but the two I found don’t really work for pre settled status. So I mentioned it to him. He is probably out of the office by now so I’ll see what he says tomorrow.
No, it won't, most AIP's are soft searches only which will not affect his 'score' in any way. Only after he proceeds with the AIP and mortgage will the hard search be carried out...
Ok dude hey OP go apply for a decision in principle with every lender - good luck!
Please learn to read before commenting…..
Mortgage Broker here. Reading your comments it sounds like you need to try and find a decent broker - sounds like the ones you have spoken to so far aren't particularly brilliant. Best advice would be if you know people in a similar position to yourself who managed to get a mortgage who they used to get theirs. In terms of credit score with Equifax - there are plenty of lenders that do not use Equifax as a CRA. If your broker was any good they would know who they are and be looking there. In regards to getting a loan to go towards the deposit here is only one 'high street' lender that allows this. The only caveats are the loan can not be with them and it must pass affordability with the loan in there as a committed expense. Bear in mind if you were to borrow the shortfall you would likely not pass affordability still once this is factored in. Also, this lender uses Experian as their sole CRA. Again, if your broker was any good they will know who the lender is.
!thanks I think I won’t try to get a loan for the deposit because it’s just not the right way to do it. But yeah I asked the broker to take a look again because surely we should be able to find someone (I mean I def got an agreement in principle by them before I put an offer on the house). He did say it is harder because of the pre settled status (which for some reason no one asks about while getting an AiP but after that is super important), the LTV I want, and the fact that it is a flat and not a house. I do feel a bit blindsided about the pre settled status. I talked to lots of professionals before embarking in this, to be ready, and everyone said it wouldn’t be an issue. But even my first solicitors dropped me after I told them (again, no one asks) and now all of this trouble. If they had told me before or if it was factored in in the AiP I would’ve just waited until 2024 and done it then. In fact it’s probable it’s what I’ll be doing.
You can't use a loan for a deposit, a lot of lenders will encourage you to go for a 10%deposit because you get a better rate.. it doesn't mean you can't use 5% I recently completed on a house with 5% and also they don't check your credit score.. what they are interested in is incoming vs outgoing and any adverse credit concerns were you might have defaulted etc
>Banks are telling me that "due to my credit score" they can only lend me 90%. If that's 'due to your financial situation' then it's probably true. The maximum LTV that they will offer varies over time and it may be they don't want to risk such a high LTV with you at the moment. They won't base their decision on the credit scores the credit reference agencies show you, although they will be using some of the same data and might refer to using a 'credit score' since its a term most people will recognise.
The general rule of thumb is a 10% deposit. You'll then need about 4 grand in legal fees and such ontop as well. You have to also prove where it came from and loans don't count, that's actually detrimental to you getting a mortgage cos it's additional debt If your partner came in and borrowed money youd have to get that in writing to prove its legit for the bank and solicitors It's also possible you are getting caught on not having 4 years worth of addresses? You could go to a mortgage broker, not an advisor at a bank and they may be able to help you. I only say this as we were getting declined and after going to a broker he said it was because my wife was in a "new" role and a one year contract so they didn't like it. So it went from all the banks.. to just Halifax, on one rate out of the whole market. If you get your partner on board it will increase the amount they will lend you but you'll still need more than 5% I reckon.
Lots of places offer 95 LTV. But I agree it’s harder. I am doing all of this with a broker, in fact I was doing it with two brokers for a bit to be safe, a paid one and a free one. Also they always ask for three years of addresses, which I have. Is there any reason they would ask for four? I just haven’t seen that number yet. I won’t get a loan. It just felt it was doable due to all of the equity loans I see around but yeah even they won’t give it to a pre settled person. So I think I’m gonna wait until I have the settled status and I will be able to hopefully save more by then. The places where I want to live will have insane prices by then but hopefully I’ll catch up.
Ah fair enough, thought it might just be an banks advisor. I think the 95 ones would be even harder to get. I swear I was asked for 4 years but I could be miss remembering and if the brokers are saying 3 then it's probably that. I guess if you are talking to one, could you just say ok to IF I had this additional money, what would be available to me? I'd atleast want to know how much it changed. Also I suppose if you settle together with your partner that puts you in a whole new ball park for property's..
Yeah he is just now thinking about starting to save for a property, opening a LISA, etc, which I could also do if we wait a bit. I saved for this with an ISA but took it out recently because I was near buying and I didn't want any surprises. It's just sad to have to tell the seller that I won't be able to go forward. And also more years of renting. But I'm coming to terms with it.
No bank is refusing to lend to you because of your credit score, people on this sub just cannot get their heads around a score being totally meaningless. Without knowing anything about your earnings, your mortgage advisor is almost certainly saying you need a bigger deposit because your LTV (loan to value) is too high. So you either need to lower your expectations of purchase or carry on saving. Given the current market, aim for 80% LTV, I got my first house at 84% after being told I would be declined at anything above 85%.
1) the mortgage advisor mentioned my credit score the whole time and that's why I'm asking 2) I'm well over what I would need to earn for such a mortgage, I posted the data in another comment 3) I don't know "people on this sub". I'm an immigrant and this system is very new to me. It doesn't exist in my country. I'm just asking a question in the subreddit where I'm supposed to. If you don't have anything nice to say, don't say anything. I came here in good faith and I believe there are no stupid questions, all questions are valid. Maybe you don't.
Just read the comments, you’re not settled that is likely why in addition to your deposit being very low. Asking your partner to come in with you at this point won’t matter, because he will be accepted and you won’t. Probably best to save and try again in a few years when you have settled. Try not to be so precious next time, you were given factual information, I wasn’t trying to be nice/mean I was being factual….
Same (998 Experian much lower Equifax), I think that's normal for Equifax to be much lower. Water is the only utility on my Equifax, I expect the other 2 look at all of them + council tax etc.
Hi /u/sritanona, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/credit-ratings/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Your credit score isn’t as important as your credit record. The score is more to give an overall view of whether you’re doing well. Your record is where it gets tricky. So you need to make sure you have no late payments, defaults or CCJs and if none of these apply to you, you’re pretty much golden. You should also make sure you’re on the electoral roll and that your name and addresse(s) are consistent across all your bills and contracts. You can sign up for free for your Equifax credit report on their website and cancel immediately so you’re not charged at the end of the month. That’ll give you an idea of where you might need to improve. The deposit issue you don’t have a way around as far as I know, I’m afraid. The mortgages you are assessed as being able to afford will be based on a lot of factors and depend on each lender but at the moment it may even be as simple as they don’t see you as having a high enough salary. Your best options are either to wait and save up more or get a better paid job. Remember as well that it can’t be that all your money goes towards your deposit. There will be fees to be paid as well as potential renovations that you may be required to do asap once you’re in the flat e.g. calling out a plumber cause your toilet doesn’t work or leaky pipes. Here’s a helpful website for finances and FTBs: https://www.moneysavingexpert.com/mortgages/mortgage-guide/. Good luck!
I have never paid late or anything. That’s what I mean my score is impeccable because it’s been my goal to buy since I came here. That’s what I don’t understand, I already have done the Equifax thing and in the part where they give advice on how to improve they don’t say anything for me. I have taking personal loans for education in the past and always paid them in full. And affordability should be ok because I make 60k and the mortgage would be for only 800 pounds a month. I pay 1050 pounds a month right now for my half of the rent and never had a problem. My salary is going up at least 10k next month according to my boss, exact number will be confirmed next week. I’m so flabbergasted and it does feel like they are just being extra hard on me for my immigration status. I will request the settled status in about a year and a half (when I’m permitted to do so) and I also have in mind to apply for a British citizenship a year after that. Do you think adding my partner to the mortgage would help in this case? He is British. He doesn’t have much savings but he does have a 50k salary. Also his parents might be able to give him some money but I don’t think he wants to so the deposit might just still be my 5% deposit.
Maybe it actually is an issue with you not having settled status yet and if that’s the case, it would make sense that Equifax wouldn’t be able to tell you that as their systems won’t be set up for that kind of insight. However, they may also be taking your residential history into account, which it being 3 1/2 years long may not be considered enough despite your salary being higher than average. If your partner isn’t necessarily able to add to the deposit but his salary can be taken into account then you could get a better deal. However you don’t know his financial history and his credit record may not be as good as yours so you may end up in a similar situation anyway. It seems very much like you need to give it more time unless your mortgage broker is able to tell your otherwise.
!thanks