Application Declined

Posted on 19 April 2016 by Lucretia Maker

My husband entered an IVA in 2005 and paid it off early in 2007.  We sold the house and rent.  We have a year to go until his defaults come off of his credit rating.  We are desperate to buy our own house.  He earns £53k and I earn £11k (as I am part time).  We have never missed a mortgage payment or rent payment.  We have a 15% deposit.  Went to an IFA and he told us that Halifax have agreed a Decision in Principle. Yippeeeee!!! We fell in love with a house, offer accepted and now underwriters have turned around and said no!!! I just don't understand. Help!!!!

Hi Lucretia

Halifax are not able to tell your IFA why they have declined your application, due to the Data Protection Act, apart from you have failed their credit score and they would normally recommend that you check your credit file to find out the exact details. As you are aware of the IVA there may seem little point in doing this, but I would recommend you check what else is registered before returning to your IFA.

It is possible to pass their Decision in Principle because this is based on a restricted credit search which doesn't leave a footprint on your file. This means that you would not be penalised for shopping around for a mortgage, but it does mean that when you do apply and a full credit search is performed, information can come to light which results in the application being declined.

I do believe that you will find it difficult to obtain a mortgage whilst the IVA is still showing and you have a relatively small deposit to put down. If you are able to reduce the amount you want to borrow so that it falls below 75% of the property value it may then be possible to get an underwriter to agree to a mortgage, but I honestly believe that you will have to wait until the IVA falls off the back of your credit record.

I recommend that you speak to your IFA, who has conducted a full factfind and has all your details, about what you should do next.

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We recommend you seek professional advice with regard to any of these topics where appropriate.


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