Agreement in principle declined

[Firsttimebuyer1]

Hi,
I’m a first time buyer and I just applied for a mortgage agreement in principle with Nationwide (it was an automatic online process, with a soft credit check only), which was declined due to failed credit file.
It didn’t say what the problem was, it just said it was due to credit score, and “this may not be due to adverse bureau information”.

I am puzzled. The only thing I can think of is that I accidentally went into my unarranged overdraft twice while a student (2 years ago) but now I have a full time job with a good salary so it won’t happen again. I’ve got 2 years of a solid income and no debts other than student loan.

I am viewing a house on Saturday and had hoped to het the AIP so I could potentially make an offer.

What should I do now? Shall I try for another mortgage in principle with Halifax or another bank that does soft credit checks only, to see if I get a different outcome from them, or is that unwise? Does this mean I won’t get a mortgage from anyone?

Any advice appreciated!

View your credit file online, Experian do a free trial I think which you need to remember to cancel

Definitely get a good broker.

Tidy up your credit record, get stuff removed that shouldn't be there, get on the electoral roll.

Get a broker who doesn't charge you. So may people I know paid £600+ for a broker, ours was free.

It’s quite possible because you don’t have enough credit. (There isn’t enough info to ‘score’ you on). As others have suggested, use a credit card and pay off monthly.

I echo the advice about getting a broker. Ours helped us borrow more than we could when applying to individual lenders directly (but still affordable and not so that the repayments were too high). We also didn’t pay them, they took their commission from the lender we went with.

OP I work for a credit card company. Too many hard searches doesn't look great. You looking at your own credit file shows as a soft search, if at all, and if a lender saw lots of those they would simply think, oh, OP is making sure she manages her finances well, great

@CheesecakeAddict

It could also be the inheritance too. My bank wouldn't take any deposits that weren't 100% savings from the applicant since covid.

Wow that's really harsh - what if the deposit is entirely equity, would that count against someone as well? Which bank is that (so I know to avoid them!)?

As others have said, go to a broker ! Also get your free credit score, clear score is the best IMO x

@Firsttimebuyer1

Is it REALLY okay to check credit score online?? I have read multiple times that checking your credit too much actually damages it??

You checking it won’t do any harm. Soft checks won’t do any harm.

Too many “hard” checks will impact your score.

You really need to go online and look.

Check my file is the best one (I'm in the middle of a mortgage application)
Use a broker. I'm not recommending the one I'm using because it's for adverse credit and costing me 2.5k BUT my credit rating is fucking awful and they've managed to get even me a mortgage

@BeautifulBirds

Tidy up your credit record, get stuff removed that shouldn't be there, get on the electoral roll.

Get a broker who doesn't charge you. So may people I know paid £600+ for a broker, ours was free.

Be careful using free brokers. They earn their money by getting commission for introducing you to mortgage companies. So there is an incentive to recommend you the lender that pays them the most commission, rather than the best deal for you.

My DD and her now-husband tried for an AIP last year; they went to a broker who got them a good deal (he charged for it but honestly I think it was more than worth it, as despite their joint income being reasonable, that they had a deposit, and could afford repayments without a struggle, the amounts they were offered to borrow BEFORE they went to a broker were not great.)

He really was worth it and they're now settled in a lovely little house and I hope you soon will be too, OP.

Go to Charcol - good mortgage broker

Are the EAs still permitting the viewing

Also, if you’re a tenant, it’s worth signing up to www.creditladder.co.uk/truelayer/connect?code=521F8583B533C3552ECA72B38E9D6910F43BF1608C19B5C8E0E480A66110AE2D&scope=info%20accounts%20transactions%20offline_access&state=61e2fa5f-d55a-41c4-b107-80316c6c89b2 as they report your rent payments to credit providers monthly, which helps boost your credit score. Completely free to do, easy to use and legit (recommended by Martin Lewis, who runs Money saving expert - www.moneysavingexpert.com/news/2016/04/do-you-rent-heres-a-new-trick-to-boost-your-credit-rating/

A broker should be able to sort it out for you, OP.

Good luck!

FYI you can shop around for agreements in principle. We found over £100k difference in what lenders were willing to lend! We used this as an affordability check and now having got an offer accepted we are using a broker to get us the best mortgage deal. Good luck!

You need to find out what's on your credit history that's causing the decline.

Knowing your credit history inside out should have been done before even thinking about buying a house.

@Insidelaurashead

OP I work for a credit card company. Too many hard searches doesn't look great. You looking at your own credit file shows as a soft search, if at all, and if a lender saw lots of those they would simply think, oh, OP is making sure she manages her finances well, great

Soft Searches aren’t visible to companies viewing your credit file. They’re only visible to you. Therefore they have no impact on your credit worthiness.

@PawsQueen

Check my file is the best one (I'm in the middle of a mortgage application) Use a broker. I'm not recommending the one I'm using because it's for adverse credit and costing me 2.5k BUT my credit rating is fucking awful and they've managed to get even me a mortgage

If you don’t mind me asking, out of interest what kind of interest rates are you looking at with adverse credit?

I’ve been working on my credit and really now just need to pay off a CCJ and a couple of credit cards (they’re not over the limit, just want them gone so I have less debt in general). So curious to know for myself how high the interest rates are for people like us, with a lower credit rating.

@Firsttimebuyer1 I check my credit report every seven days. Just a habit I got in to, it won’t cause you harm.

Check your credit score. Dh had a CCJ attributed to him but was a clerical error. Someone else of the same name had it. So annoying and caused us no end of problems.

@browneyes77 4.10% is what I've got

@Firsttimebuyer1

Hi, I’m a first time buyer and I just applied for a mortgage agreement in principle with Nationwide (it was an automatic online process, with a soft credit check only), which was declined due to failed credit file. It didn’t say what the problem was, it just said it was due to credit score, and “this may not be due to adverse bureau information”.

I am puzzled. The only thing I can think of is that I accidentally went into my unarranged overdraft twice while a student (2 years ago) but now I have a full time job with a good salary so it won’t happen again. I’ve got 2 years of a solid income and no debts other than student loan.

I am viewing a house on Saturday and had hoped to het the AIP so I could potentially make an offer.

What should I do now? Shall I try for another mortgage in principle with Halifax or another bank that does soft credit checks only, to see if I get a different outcome from them, or is that unwise? Does this mean I won’t get a mortgage from anyone?

Any advice appreciated!

You don't have to go with Nationwide, as others have said try a whole of market broker who will look at your circumstances and find you the best deal for you. Lots of them are free as they make their money through referrals from the banks/ building societies. We used a broker called lifetime planning who have been good but I'm not sure if they only do Scotland.

Also check your credit score. If there's nothing that you can think of there may be something on there that you can explain / dispute. Experian offer a 30 day free trial and give really clear explanations for everything.

Best get your finances in line first, good luck!

Go on Experian, pay to join, it will tell you in great detail. Getting a credit card , use it and pay it off monthly is my tip, boosted my rating.

Also a broker is really recommended, mine got he my dream home via clever refinancing.