Applying for mortgae with 999 credit score, BUT (NR Mortgage related)....

booboomania

We are moving home, having sold our house which is on a NR Together Mortgage. When we purchased our house this was on a 80% mortgage and a 20% unsecured loan. Following alot of renovation work and mortgage overpayments, the balance of our mortgage has dropped significantly and we have sold our house leaving us with a decent amount of equity for the next.

I've just run my credit score through Experian and was very pleased to see I have a score of 999, with no defaults or anything to be concerned about, EXCEPT... the unsecured amount of the loan is showing as a loan from Northern Rock, separately to the mortgage (which of course makes sense!). I'm just wondering now, whether anyone making the searches on my credit file in the future will link the two together? Or could it look as though I have a rather large loan against my (and my husbands) name and therefore effect a morgage application?

Sorry this is so long winded! Hopefully this makes sense to someone!

beecher2

Are you paying off the NR loan before moving?

Conrad

Of course an unsecured loan will have a baring on affordability.

booboomania

We were planning on the unsecured loan being subsumed by the new mortgage - had thought this wouldn't be a problem as our LTV would still be above 90%.

We could continue with the unsecured loan, but my understanding was that this would be at a much higher rate than we pay currently.

beecher2

booboomania wrote: »

We were planning on the unsecured loan being subsumed by the new mortgage - had thought this wouldn't be a problem as our LTV would still be above 90%.

We could continue with the unsecured loan, but my understanding was that this would be at a much higher rate than we pay currently.

I take it you mean above 90%?

Make it clear to your new lender that you're paying off the loan - I'm sure they'll be aware of how NR Together mortgages look on a credit report.

kingstreet

This thread might interest you;-

https://forums.moneysavingexpert.com/discussion/3158508

Note Mr Herring's words.

booboomania

Thanks Kingstreet, very interesting! I always assumed that mortgage lenders considered credit scores as part of the overall assessment of the debt risk, but maybe we dont all need to be so diligent with making sure were not borrowing too much and making payments are on time...

I've just spoken to Northern Rock and they have confirmed that in most cases the new lender takes over the unsecured loan as part of the new secured mortgage, so looks like this will be the way to go.

kingstreet

booboomania wrote: »

Thanks Kingstreet, very interesting! I always assumed that mortgage lenders considered credit scores as part of the overall assessment of the debt risk, but maybe we dont all need to be so diligent with making sure were not borrowing too much and making payments are on time...

I've just spoken to Northern Rock and they have confirmed that in most cases the new lender takes over the unsecured loan as part of the new secured mortgage, so looks like this will be the way to go.

Aye. Credit account conduct is one feature of a lender's credit score. Stable employment history and addresses help, as does making sure you put all your telephone numbers on the application. We've had people fail on these 999 scores, yet others who say their scores are only fair are offered a mortgage every day.

You're correct on the NR Together unsecured bit. Pay it off as part of the mortgage process. Put it down as a separate commitment (to the mortgage) on the mortgage application form and tick the box to indicate it will be repaid on, or before, completion.