Mortgage application success could be threaten by pay-day loans.
Pay-day loans are threatening borrowers chances of achieving mortgage approval with some lenders.
With some lenders the warning is mortgage applications may be rejected if you have taken out a pay-day loan even if you have paid it back.
One lender to refuse applications is GE Money who advise it is no longer prepared to consider mortgage applications from would-be borrowers who have taken on short-term pay-day loans within three months of the application, or twice in the previous year.
A spokesman for lender commented saying that it is a responsible lender, and during economically challenging times it is essential to review all data to ensure it makes prudent lending decisions. Included in its review is high interest short term loans, and those applicants who have taken on such loans are unlikely to have their mortgage application considered.
Specialist credit check companies are coming under increasing pressure to highlight pay-day loans on their data. Experian have already started to move away from providing a generalised overview of borrowing and are beginning to list pay-day loans separately in their reports.
Experian advise that because of the short term nature of pay-day loans with many accounts being opened, the credit check industry has been pushed to present this information separately.
If you are looking for a mortgage deal you are advised to contact independent 'whole of market' broker Deal Direct. We will search the market for an appropriate deal for you.
