Mortgage Pre-Approval Question

super_g

If I have had 2 months of mortgage arrears within the span of 1 year will I be penalized come renewal time?

It is a 2 year fixed term mortgage. The term ends August 2011 and is pre-approved in June.

I cannot get a straight answer from any where! I called NatWest... put on hold for 30 minutes... then through to another department... another 45 minutes... then through to another department... and finally... 15 minutes... and then to another department... who said AH HAH you need to speak to the Accounts Management Department! I got through and they were closed! :eek:

Basically, I want to know if my recent arrears will impact my ability to get a low rate mortgage with NatWest again. I don't quite know how pre-approval works. Is it a letter I can take to any other provider and they will not credit check me? I spoke to NatWest last month and they said they will not credit check me if I renew with them... now I have ten different stories... from 5 unsure departments... :mad:

HELPPPPPPPPPPPPPPPPPPPPPPPPPPPPP!!!

Thrugelmir

Pre-approval for what?

At the end of the fixed term you will default onto the terms specified by your current mortgage product.

Your choice of product may be impacted by your recent history.

A new lender will result in a full application process including credit references. Arrears history will impact upon their decision.

super_g

I was informed by NatWest that when it comes to re-new my mortgage in August - they will contact me in June to see if I want to stay with NatWest.

From June I can decide what product I want but I guess some will be out of the question e.g. an Interest only option with NatWest due to arrears in last 12 months.

So I have been told that they are willing to keep me on and offer me a good rate/deal without taking my credit history into account i.e. they would over-look my arrears and allow me to enter e.g. another fixed rate repayment term.

What I don't understand is that now... I have several different stories that don't marry up. Someone at NatWest said that the arrears will be considered when an offer is made... someone said they will over-look the arrears but not look at an Interest Only option... so which one is it?

I tried to call again today.. to get through to the Accounts Management Department.. and I was transferred from department to department again!!! :mad:

All I want to know is if I am in for a shocking rate or not because of my previous arrears.. I don't know diddly squat about mortgages/renewal.

Help?

Thrugelmir

Even if interest only was an option . You would still need to show evidence of a suitable repayment vehicle. So in all honesty you are better off with a repayment mortgage as it helps you manage your money.

I doubt that you will get an answer fron the Natwest today about a decision that will be made in the future. Lending rates are change rapidly and criteria has tightened enormously over the past 12 months.

As I said before your existing product will default onto a given rate at the end of the term. Read your mortgage details.

As for rates in the future you'll have to wait until the time comes.

Get yourself onto the DFW (Debt Free Wannabe) board. Great advice and support on there.

Conrad

Thrugelmir wrote: »

Even if interest only was an option . You would still need to show evidence of a suitable repayment vehicle. So in all honesty you are better off with a repayment mortgage as it helps you manage your money.

You won't always be asked to 'show' a repayment vehilcle. In most instances a verbal assurance that you have an Isa WITH 'X' Bank will suffice. At a time of payment difficulty it is often wise to use interest only for a while rather than soldier on with capital and interest and end up losing the home.

Interest only can be a temporary solution and is most certainly allowed by the FSA, as confirmed in writing to me by them (supplied by Sheila Nicoll - head of risk). There are many urban myths arounf this matter.


OP - it is unlikely Nat West will offer you a new 'deal' due to the arrears.

Write to them using special delivery post to get this pinned down. I suspect they wont make a meaningful reply until about May so they can asses based on an up to date picture.

Thrugelmir

Conrad wrote: »

You won't always be asked to 'show' a repayment vehilcle. In most instances a verbal assurance that you have an Isa WITH 'X' Bank will suffice. At a time of payment difficulty it is often wise to use interest only for a while rather than soldier on with capital and interest and end up losing the home.

Commonsense dictates that someone struggling to pay their mortgage won't have a repayment vehicle and quite possibly no savings for that matter.

Without the full details difficult to comment on an individuals financial circumstances. Most people can cut back somewhere if they really have to (and want to of course).