THAT’S WHAT FRIENDS ARE FOR Equifax offers advice to first time buyers
applying for a joint mortgage withfriends
Although house prices are levelling off, many first time buyers are still having trouble getting on the first rung of the property ladder on their own and therefore consider buying with a friend or friends. But when buying with friends, it is important to be aware of each other’s financial standing before applying for a mortgage. Equifax, a leading credit reference agency, is therefore urging first time buyers to get a copy of their credit file to help them review their current financial obligations and make sure their credit history is not going to affect their mortgage application.
A mortgage lender will use the information on an individual’s credit file, together with the information on an application form, to reach a lending decision. Lenders will verify an individual’s identity and address, using Electoral Roll data and compare it to the information provided on the application. A credit file also includes information on current and previous credit agreements and County Court Judgments (CCJ), all of which is taken into consideration when a lender assesses an application.
Friends who are planning to buy a house together should make sure they each obtain a copy of their credit file before applying for a mortgage. This way they can review all the information a prospective lender will use and ensure it offers a fair reflection of their financial status.
If any of the parties buying a house have been in financial difficulties in the past, it is a good idea for them to apply to Equifax for a ‘Notice of Correction’. This allows an individual to write a 200 word statement to explain their situation and it will then be flagged to any potential lenders every time the individual makes an application for credit.
Neil Munroe, External Affairs Director of Equifax comments, “Quite often people overlook previously shared financial commitments from the days when they were in shared rented accommodation. For instance, people may have had hire purchase agreements on a TV or washing machine. It is best to make sure that all payments have been made and the account has been closed to prevent it impacting a new mortgage application.
“By obtaining a copy of their credit file, individuals can also see all their current and previous financial commitments, which will help them make realistic financial plans for the future.”
EQUIFAX’S TOP TIPS FOR BUYING A HOME WITH FRIENDS
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Munroe concludes, " If an individual believes they have a poor credit history, it might be advisable to apply for a mortgage face to face. This will allow them to add further explanation of their financial circumstances.”
Consumers can request a copy of their Credit File by logging onto www.equifax.co.uk. Equifax will also accept written requests addressed to Equifax Ltd, Credit File Advice Centre, PO Box 1140, Bradford BD1 5US. Please include full details of the consumer’s title, full first name, middle name, surname, and addresses at which the applicant has resided during the past six years, together with the statutory charge of £2.00.
For further information please contact: Cecile Stearn, Susan Abbot, Sarah Samee or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: cecile@harrisonsadler.com
