Mortgage offer requires payment of credit card we don't have?!

jimmy_81

Hi all, got a slightly weird question for you!

In process of buying a house, FTB, all seems to be going OK. We initially had a mortgage offer from the Coventry through our broker but having secured a greater deposit than we had initially thought we could, we applied for and have received a second offer from Nationwide - at a much cheaper rate so very happy! :beer:

However...

When I read through the small print on the Nationwide offer, there was something at the very end in the T&Cs - a section for "Special Conditions". Most of these were generic, stuff about parking spaces & so on - but one section got me very concerned - "Debts you will repay on or before completion of this mortgage."

Within this section it goes on to say that we must pay off "Credit Card with virgin with an approximate balance of £XXXXX".

Only problem is, we don't have a credit card with Virgin! :eek:

Both my wife and I used to have Virgin cards, however, she closed hers in April and I closed mine in June. Neither did either of these cards have a balance anywhere near to the £xxxxx specified...

We do have credit cards carrying a (0%!) balance, however we made this clear to the broker when applying for the mortgage and presumed affordability of repaying these was taken into consideration when the mortgage offer was made.

Now - I'm hoping that as the offer references a debt we don't actually have, it's nothing to worry about! :rotfl: On the other hand - as the biggest loan I'm ever likely to have, I want to be absolutely sure this isn't going to cause us any problems.

I have of course queried this with our broker and they're checking it all out, but just was curious whether anyone's come across something like this before, and what you did about it?

Thanks for any replies! :T

kingstreet

If the repayment of a debt and a mortgage application happen close together, you often enter the debt on the mortgage application, ticking the "to be repaid on, or before completion" box to evidence to the lender that the debt will be gone, or has already gone but the credit system may not have been updated yet.

The worst thing you can do is assume it has gone from the credit search, leave it off the form, then the lender believes you have credit you are trying to hide if it's still visible.

I'm only guessing, but it's quite possible this is what's happened. Ask the broker for a copy of the mortgage application they submitted to Nationwide. A downloadable pdf is produced when it is submitted. Have a look at P6 "Monthly payments for any personal loans/hire purchase being cleared on or before completion" and "Credit card balances being cleared on or before completion" on page 7.

Paully232000

Ask your broker to phone them and ask where they got this information from.

Also, If I were you I would check your credit file with the three companies who do this, equifax etc and make sure that there is not anything on there that would make the mortgage company think you have a balance on a CC.

I had that as a condition of my mortgage and did have CC balance. I have paid it off now but does still show as a balance of a few thousand on my credit report, so all I did after advice from my broker was to get the latest statement from Barclaycard showing the payment and £0 balance, and the bank statement with the debit for the same amount. Solved any concerns they had about having CC debt

JimmyTheWig

I agree that it is worth checking your credit file. Sometimes they can be wrong. The sooner you find out that it is wrong the better.

jimmy_81

Thanks to all of you for the helpful responses. I have double (and triple!) checked both my wife and my credit reports now and nope, they definitely show the Virgin cards as closed.

Things have now got even stranger, however...

The broker - who's being brilliant - has double checked their copy of the mortgage offer; lo & behold, that does NOT have this condition listed!

???

So the broker then spoke to our solicitors to enquire what their copy of the offer said...

Sure enough, their copy of the offer didn't include the condition either!! :huh:

How very strange...

In any case, our broker has advised that since the offer with the solicitor is the legally binding one, we shouldn't worry about it and it must just have been a typo of some kind.

Needless to say, I'll be asking the solicitor for a copy of their version and reading it very carefully!

Thanks again for your replies :T

JimmyTheWig

Curiouser and curiouser!