Mortgage freak out

[Jillybean13]

Hi

Looking for some advise as a first time buyer, have a decision in principle/AIP whatever you want to call it. Offer accepted on a house and just starting the rest of the process now. However, I'm starting to worry that a mortgage will be refused when it comes down to it.

My credit score is 449/1000, I have zero debt, I don't own store cards or credit cards, I don't have store credit, finance on cars or furniture etc. I never buy what I can't afford. I have two phone contracts direct debit coming out each month, £10 DB per month to specsavers and then the usual house insurance which I pay annually, Netflix, prime and Disney+. Will this all go against me do you think? I'm buying with my DP who is in a similar position credit wise if that makes any difference.

I don’t think you can get an AIP without a credit check. We’ve always used a broker for ours. I have no credit or debt. DH had a default. Neither were a problem.

Thank you. Hopefully we're okay too then.
I think AIP is a soft check and was approved straight away but from what I've read they're not overly worth the paper they're printed on.

They must have credit checked you to give you the offer

They did @Hoppinggreen it's just everything online says the AIP doesn't really matter in the grand scheme of things even though they do a soft credit check. I think it's the hard one that matters, then things online saying you need credit card/s and a credit score of at least 500 as 449 is under average

I think, though I might be wrong, that the long application focuses more on affordability than your credit score. They will comb through all your expenses and stress test if you can afford the monthly payments. Last time we got endless grief about optional spending. So if you are worried cancel any subscriptions you don't need.
They also take a proper look at how much they think the property is worth. So that is another thing that can go wrong.

I have a crap score, a couple of defaults and debt and managed a remortgage which was complex
Yes I had to use a specialist lender but it was all fine

Honestly you're totally over thinking, we got a mortgage in Feb last year of 3.5 times our joint income with also 25k worth of debt and childcare fees each month (joint income 60k). No defaults and nothing overdue ever. 80% loan to value.

Credit scores don't really mean anything, they're an arbitrary figure created by credit reference agencies to give you an indication of how lenders will view an application for credit from you. Lenders don't see the score, but they will be able to view risk factors from your credit report itself, including credit utilisation, payment history, etc.

Generally speaking only a soft search is done to obtain an AIP, so it's possible that the lender's position will change upon conducting a hard search, or it may just be that your case is referred for additional checks by their underwriters. If you have no negative factors in your credit history e.g. missed payments, but an absence of positive factors e.g. consistent, reasonable credit utilisation with regular payments made, then you may well be fine. Those positive factors are things you can work on yourself though, so I'd recommend looking into things you can start to do (the CRAs often have lots of helpful info on their websites to get you started under "How to build good credit" type guides).

Full credit checks aren't run until the mortgage application is submitted

Mortgage in principle is usually based on information you've provided such as income and outgoings. It is based on affordability.

I was similar to you, no debts or credit cards and every subscription service under the sun. I might have been shielded from some of the back and forth by my broker, but no one even seemed to bat an eyelid. Good luck!

I wouldn’t worry. To be honest, I don’t even know my credit score (nor does Dh) and I’d only lived in the UK for about 8 years when we applied. Neither Dh or I have debt or credit cards. Never had a car on finance. I’m on a fixed term contract and Dh is self employed (though we both earn very well), and we had no issues getting a mortgage and a much bigger one than I ever expected (we didn’t use all they’d lend us though).

Ah thank you so much everyone. I feel a little more calm now. Pregnancy and stress are making me overthink I reckon. So thank you ☺️

Credit score is only seen by you and the company that provide you it, it is irrelevant. What lenders look at is affordability, how you manage your money and credit history, from what you've written, I think you'll be found

I'm sure it will be fine given that you already have your AIP. Are you both registered to vote? As that can has a big effect on your credit score

@Londongent yes we recently re-registered when they did the renewal thing a few months back so definitely on the electoral roll