Mortgage Application - Undeclared Commitment

sockpuppet

simplymegreg wrote: »

I have always been told that if I pay off my CC in full every month and never leave an outstanding amount on it that isn't to be repaid when due then:

a) It isn't taken into consideration; and
b) It is not necessary to declare it.

It is still an active credit account though.
If it has a nil balance at the time they are assessing your affordability then it wont be taken into consideration, but if they do a later audit and it then has a balance then they will readjust the figures
We have had several issues with open credit accounts that were not declared at application

kingstreet

FWIW I always enter "nil balance" credit cards when keying a mortgage application with the "to be repaid on/before completion" box ticked.

aha77

Without getting into the whole CRA have too much power etc argument, one thing that baffles me is that the data showing on the reports is always at least 2 months behind. This therefore negates the whole 'paid on or before completion' stuff, as one week before completion my CC balance could show as 0 on an audit, but in actual fact I've just maxed it out to the tune of 10k. It seems to me that if lenders are going to put so much faith in these reports they need to actually be accurate.

holly_hobby

You're forgetting that you would be legally bound to declare the now 10k maxed card, as a material change to the application - following which it would be re scored/underwritten.

Hope this helps

Holly

aha77

I'm not talking about the legal obligation. I'm merely talking about a massive whole / fault in the the system of assessment. People are turned down all the time for mortgages, as this forum will testify to, for historic, relatively minor misdemeanors which people carry around like a ball and chain, until they disappear after an arbitrary period based loosely on criminal convictions. My point is that the system needs to be properly regulated and run to be any use, for both lenders and those wishing to borrow money.

shonzyd

If you were applying for just a DIP what was the booking fee you paid for?

BOBBIs_MUMMY

Ok, thanks for all your help so far.

Just done a report for my husband shows 7 credit accounts, total of £3550 available credit (excluding mortgage) no outstanding debt, 0 missed or late payments in last year and 0 accounts overdue.

Can't see anything on there that we don't know about

BOBBIs_MUMMY

oh and credit score of 999

holly_hobby

aha77 wrote: »

I'm not talking about the legal obligation. I'm merely talking about a massive whole / fault in the the system of assessment. People are turned down all the time for mortgages, as this forum will testify to, for historic, relatively minor misdemeanors which people carry around like a ball and chain, until they disappear after an arbitrary period based loosely on criminal convictions. My point is that the system needs to be properly regulated and run to be any use, for both lenders and those wishing to borrow money.

Its actually based on the statue of limitations, as detailed witin the Limitation Act 1980, and has nothing to do with the Rehibilitation of Offenders Act 1974.

Whilst a missed or defualted payment, may seem to the public to be as you say a minor mis-demeanour,, it isnt to the lender, and may be indicative and reflective (based on statistics) of poor financial management, over exposure to credit etc - of course depending upon the blip, the reason behind it may be acceptable to the lender, but that will be on a case by case basis.

The CRAs can only update with credit data, as and when reported to them by the providers - I agree its not hour accurate, but as I say if you did take on any extra credit between offer and completion, it is EXPECTED that this is declared by the applicant - not to do so is technically non-disclosure.

Hope this helps

Holly

holly_hobby

BOBBIs_MUMMY wrote: »

Ok, thanks for all your help so far.

Just done a report for my husband shows 7 credit accounts, total of £3550 available credit (excluding mortgage) no outstanding debt, 0 missed or late payments in last year and 0 accounts overdue.

Can't see anything on there that we don't know about

Where any of the 7 accounts declared within the app ?

Or were they all excluded due to their nil debit balance ?

H