Getting a Mortgage with an outstanding Payday loan

Getting a Mortgage with an outstanding Payday loan

In this post our client’s (a Manchester couple) wished to get a mortgage for a house they wanted to buy in Wythenshawe. Although both of them now had jobs,  the lady previously had a payday loan she had defaulted on, with a small balance still outstanding.

CLIENTS SITUATION

Manchester Mortgages received this enquiry through our Contact Page on our Website.

wythenshawe mortgage brokersOur prospective clients were a homeowner and a first time buyer living in the Wythenshawe area of Manchester. The first time buyer had a default registered against her in relation to a payday loan that was still outstanding from 5 years previous with a balance of £143.

Both applicants were in full time employment with excellent income and a £40,000 deposit once they had sold their current property and paid of the mortgage.

One of the clients had Student Loan and with a monthly payment of £ 135 per month.

They also had two dependent children with £300 child care costs

The clients were looking to purchase a property of £300,000

THE PROBLEM

Taking all of the above into consideration you would not think our Wythenshawe clients would have a problem obtaining a mortgage as there are more lenders available in the market place and that are able to offer mortgages to clients with defaults.

However, as the default was in relation to a pay day loan which was still outstanding and lenders were not prepared to lend for at least 12 months after the payday loan had been settled and the lenders who were willing to lend were offering a interest rate of 4% plus.

THE SOLUTION

After researching the whole of the market Manchester Mortgages found a high street lender willing to lend on a competitive two year fixed rate as long as the outstanding pay day loan was satisfied and would ignore the default as the credit scoring would be mainly based on the applicant who had a clear credit history.

CONCLUSION

mortgage approvedOur clients now own their new property in Wythenshawe and by fixing the mortgage rate at below 2% ( at least half the rate of a specialist lender) they will know what their mortgage payments will be enabling them to budget.

At the end of the fixed rate period Manchester Mortgages will be able to contact them to review their mortgage requirements again and as the default will no longer be showing on her credit record we will once again be able to review the whole of the market.

Manchester Mortgages were also able to advise and arrange the Life Assurance and Critical Illness to provide valuable protection of new mortgage should the very worst happen.

SUMMARY

Our Wythenshawe clients had spent two months speaking to other brokers who were not able to assist them. Manchester Mortgages has in excess of 75 years experience arranging mortgages for a variety of clients and situations on a daily basis. CONTACT US ON 0161 706 0242 or send us a message through our contact form and one of our highly experienced advisers will contact you to discuss your personal situation.