Mortgage application - old debt

emma1301

Hi,
In 2005 I stupidly took out a unsecured loan to consolidate mine and my husbands debts. Loan for £25k with Lloyds. In 2007 we split but I couldn't afford to keep up the re-payments on my own and my ex-husband has never helped me financially (even in csm).
Lloyds transferred my debt to Apex telling me they would accept a lower re-payment plan. On 19/05/08 a default was registered against me for the debt.
Anyway, cutting the story short, I've paid Apex £60.00 pcm ever since.
For the last 6 years I kept up my repayments on all of my credit accounts and I am waiting for the default to drop off - 19/05/14.

I am now ready to apply for a mortgage with my partner (excellent credit history) and I will be asked to disclose all my debts.

Should I disclose this old loan? The fact that I still remain to pay £60.00 pcm to Apex will show on my bank statements but the loan itself will not appear on my credit report in a couple of weeks.

We are restricted to minimal mortgage lenders anyway due to adverse mining report for the property we are buying and therefore need to get the mortgage application with the recommended one.

Any help would be appreciated

Thrugelmir

Not to disclose the debt on the application form is paramount to committing fraud. Which then could severe repercussions going forward. Why not clear the debt immediately?

ACG

Have you looked at your credit reports? Is the account not being defaulted every month?

emma1301

Thanks for your replies.
I dont have the funds to clear the debt as this will mean no deposit for the new house.
My credit report shows it being in default each month but this will drop off 19/05/14. Noddle already shows it as dropped off.
Thanks

Thrugelmir

emma1301 wrote: »

I dont have the funds to clear the debt as this will mean no deposit for the new house.

Priority should have been given to clearing the debt. Treating the old debt as an interest free loan won't register very well with a lender if they find out. If your bank statements are reviewed then the lender will know who Apex are.

Lenders share data on fraudelent applications.

http://www.nhunter.co.uk/

All mortgage lenders who are members of the CML use this service which is provided by Experian.

emma1301

Yes, I would agree that I should clear priority debts, however our deposit money is not a lump sum in a savings account its what we will have in equity (house in my partners name). This is only available if we sell....if we sell we need somewhere to go therefore the equity is for a deposit for the new house.

Thrugelmir

emma1301 wrote: »

Yes, I would agree that I should clear priority debts, however our deposit money is not a lump sum in a savings account its what we will have in equity (house in my partners name). This is only available if we sell....if we sell we need somewhere to go therefore the equity is for a deposit for the new house.

Then your only option is to declare the debt and await the lenders response. In the meantime may well both worth increasing the standing order to speed up repayment and reduce the debt owed. As it's not an issue that's going to go away.

emma1301

Thank you.
Would you suggest that this debt will go against me then despite my credit rating being good (in 2 weeks anyway)?
Or, would we be better just making the mortgage application in my partners sole name on his sole income (he has enough to satisfy their lending amounts)?
If we applied jointly, and this was declined, would we still be able to then make a single application?
Soooo many questions....sorry

Thrugelmir

Lenders do not use CRA's scores per se. Your mortgage application will be considered in line with their lending policy. Of which data from the CRA's will form part.

You'd be wise to consult a mortgage broker who could then look at your circumstances in detail and advise you accordingly.