Turned down by Barclays for moving mortgage

StillSkint

My partner and I are having difficulty getting a mortgage. We currently have £150,000 deposit on a property we want of £325,000. I also have a property valued at £160,000 with a mortgage of £82,000 which is currently let out. I have around £6,000 worth of credit card debt split between two cards which is up to date payment wise and is gradually being paid off.

When we attempted to get a mortgage for our new property through Barclays we were turned down for me having late payments. This was a complete shock to me, as far as I was concerned I had been paying everything religiously. When I looked at my Experian file all my other credit was in green, up to date and satisfactory except for one company called CL Finance who I have been paying off monthly since 1998 when I got into financial difficulty £12.98 a month to pay off a store card. At the time of the credit check last week there was £101 outstanding which I have now paid off. I have got statements to prove this and bank statements which show the standing order going out every month without fail to CL finance. Despite the fact I have been paying every month it has shown up as missed payments on my credit file for 36 months as it was an arrangement and not the minimum payment for the store card, at least this is what CL Finance told me when I phoned them.

I am a nurse earning £21,000 a year and my partner is a manager for a utilities company earning £30,000 a year. We could sell my house that I let and him take at the mortgage on his own, but it seems stupid that we cannot get a loan despite our good scenario because of £100 outstanding, that I was paying off all along anyway and I really want to keep my house going as we can easily afford it - the rent more than covers the mortgage.

Do Barclays actually look at the amount outstanding or do they just see the red marker on Experian and reject it? I had sent copies of my statement and the confirmation that the account was settled to Barclays, but have been told that they "probably will not reconsider lending to someone who has late payments on their credit record". Will it be worth going to my current Lender who are Nationwide or do they use the same criteria, or do we have to go the route of bad credit mortgages?

Any advice on which is the best way we can get a mortgage much appreciated.

Conrad

The sort of lender I would usualy try in such circumstances would be a small Building Society as they will tend to see the common sense in a case like this.

Nationwide may do it, but they are large and cumbersome and sometimes the lofty underwriters take weeks to make a decision so I tend not to want to engage in such a cumbersome process.
Be aware that large lenders have a long winded script driven process. You will find yourself on the phone for hours answering inane irrelevant questions aboput things like insurance when all you want to know (for now) is whether you have got the mortgage!

I think you will get a mortgage without too much difficulty.

JA1000

Too late to do anything about it but why with all that capital and two houses was this credit not paid off? It questions any other oversights. I would wait a few months as this has now been satisfied - I guess this is at the risk of losing the property. This is to 'fresh' and will be highlighted everywhere.

So you have sold your house and are sat with £150k cash in rented? Or have you sold and this will contribute to £150k deposit?

StillSkint

JA1000 wrote: »

Too late to do anything about it but why with all that capital and two houses was this credit not paid off? It questions any other oversights. I would wait a few months as this has now been satisfied - I guess this is at the risk of losing the property. This is to 'fresh' and will be highlighted everywhere.

So you have sold your house and are sat with £150k cash in rented? Or have you sold and this will contribute to £150k deposit?

I have been at Uni for three years on a bursary, qualifying last August so up until then was on a pretty tight budget although have finished Uni without any debts (at least I thought I had!) and all my mortgage and credit cards up to date. As far as I was concerned I WAS paying off this credit.

The £150,000 deposit comes from the sale of my partner's house, the equity in mine is still in the property which is let out for £750/month. I am not putting capital into the new house, but am taking on 50% of the mortgage, and we plan to have legal documents drawn up as such to protect my partner's interest.

We have a house in mind, so we can't wait for a few months, obviously if I had applied for any credit in the last 11 years I would have realised that the money paying off was not counted as paid due to it being an arrangement.

getmore4less

StillSkint wrote: »

The £150,000 deposit comes from the sale of my partner's house, the equity in mine is still in the property which is let out for £750/month. I am not putting capital into the new house, but am taking on 50% of the mortgage, and we plan to have legal documents drawn up as such to protect my partner's interest.

Be interested with what you come up with for this, many people seem to get it wrong even with legal advice.

happybroker

Woolwich are as keen as mustard on late payments at the moment, more so than other high street lenders. You may well be able to get the required finance though I doubt the Woolwich will allow you to port....sorry.

StillSkint

happybroker wrote: »

Woolwich are as keen as mustard on late payments at the moment, more so than other high street lenders. You may well be able to get the required finance though I doubt the Woolwich will allow you to port....sorry.

Yes, it would have been through the Woolwich although it was Barclays branch we went into. I have phoned my lender, Nationwide local branch, and they are getting back to me although I don't hold out much hope as after phoning around numerous building societies I have been told that they won't lend to us. I have phoned Experian and they say although the account will show as satisfied the late payments will stay on record for two years.

If Nationwide won't lend it to us, then we are going to go to a financial adviser, although we will probably pay over the odds interest wise for an "adverse credit" mortgage we could remortgage again after two years once the late payments have fallen off my credit report.

happybroker

try and make sure it's a broker who specialises in mortgages (not one that "claims" to specialise in adverse deals as they charge the earth.

As Conrad said, there a couple of the smaller building societies that would be well worth a good broker speaking to for you. Much of this is in how it get's "pitched" to the lender and what their relationship is like.

Don't be too downhearted if Nationwide let you down, I think you could be ok.

StillSkint

We have now got a mortgage from Britannia, their rates were as competitive as Barclays, and they considered debt on an individual basis (so I am told!), hence a 13 year old debt of £101 which had been paid off wasn't really considered a bad risk.

Was all done over the phone, and the adviser talked it all through with the underwriters and was agreed in principle before they took a formal application and did a credit check.

Thanks for all the advice :-)

mclaren32

StillSkint wrote: »

We have now got a mortgage from Britannia, their rates were as competitive as Barclays, and they considered debt on an individual basis (so I am told!), hence a 13 year old debt of £101 which had been paid off wasn't really considered a bad risk.

Was all done over the phone, and the adviser talked it all through with the underwriters and was agreed in principle before they took a formal application and did a credit check.

Thanks for all the advice :-)

Fantastic news. :beer:

RX-78

I was promptly turned down by Barclays/Woolwhich over the phone upon saying the word "selfemployed" and "recent" in the same sentance.

I went into my local branch shortly after to organize transfer of my account to HSBC who has offered the mortgage. When the manager looked at my account he asked why I decided not to get a mortgage with them as I've been with them for 15 years, had over 30k in deposit and no bad credit with them and a good job (I work right across the street). He looked truely gutted when he realized some young inflexible advisor decided its a no go purely based on the two words and failed to pay attention to anything else, especially as I've told him I'll be moving all my business to HSBC now.

HSBC whilst been inefficient (we had to go there 4 times before they finally made a formal offer) used some common sense to look at my case. Mind you, looking at the forum it may be just be my local branch that was flexible though....