Will I get a mortgage with previously bad credit including payday loans?

[Nelson251]

I will be applying for a mortgage and I’m worried that I won’t be accepted due to previous bad credit. While at uni, I had no money and no one to support me what so ever. In this time I lived at the bottom of my overdraft and also regularly went over my over draft. I had a car on finance and missed some repayments, although I always paid (wouldn’t pay for a month and then I’d call and pay 2 months in one go). I also took out payday loans, I did always pay these on time so I’d get one pay it off at the end of the month then get another etc.

I’m in a much better financial situation now. I haven’t missed any payments in 3 years. I rarely go into my overdraft and I’m earning a good salary. I replayed absolutely everything I’ve ever owed and now when I look at my credit rating on Experian or similar it comes up as excellrnt.
Will I be accepted for a mortgage? I’m almost scared to do it just in case I get turned down.

Yes, based on what you have said above, you should have no problems.

I agree it sounds fine and like it has recovered. Go by what Experian says.

Just to add, you probably have already looked into it but If you are ready to start looking at properties I’d get a decision in principle from a lender (a credit check and affordability). It will reduce the risk of losing out on a house you like by getting turned down afterwards. Good luck!

Thank you, that’s very reassuring. I thought they’d take one look at having a payday loan in the past and say no.

Another quick question do you think it’s better to go direct to my bank for the DIP or to go go a mortgage advisor?

You can apply for a mortage in principal online with Halifax and Santander and it will give you a straight forward yes or no answer.

Santander are offering 5% deposit mortgages at the moment but only if your credit rating is high enough, which you have said is, so that would be my first port of call.

Please help.
I applied for a loan which was agreed but tippexed out my payday lender loans. The finance company saw this and have said that they will be conducting an internal investigation but won’t say what will happen.
I cancelled the loan application immediately

@Nelson251- have a read of debt camel (a website) - reference your payday loans - I'd be surprised if you got a mainstream mortgage but a broker should be able to help you easily enough

Also, if you need to borrow above 90% of the property's value you'll find they are far stricter as the bank with have to go though a mortgage indemnify rules. If you can keep it below 90% they can be less strict.

Go see a mortgage adviser. They will look at your finances and will be able to point you at a mortgage provider that should accept you. Mine was worth twice his weight in gold.

You can sign up to Martin Lewis MSE and get free credit reports and it shows you your score & suggestions to improve

I think it sounds like you'll be ok though but check it first to make sure there is nothing too bad on there.