Mortgage Application- issue with rent account statement

JohnnyWelsh

I've just submitted a morgage application with Magellan. This is the only lender available to me as I had entered into an IVA in 2015 which was satisfied in 2017. Magellan have come back with a query about my rent account statement.

The issue is that I was entitled to housing benefit due to high child care costs up until last December. Housing benefit was making payments 4 weekly in arrears so it looks as though I've been in arrears during the entirety of my tenancy. I've tried to explain this to my broker but he's saying the lender will want housing benefit to write a statement confirming this. This isn't something they're willing to do as the phones are manned by customer service advisors.

I'm a bit annoyed at my broker as I feel that he should have seen this as a potential problem. I'm sure we could have evidenced the rental payments with my bank account and a landlord reference.

Does anyone have any suggestions as to how else we could prove that housing benefits are paid in arrears? The thing is I had actually been overpaying my bit and ended up with credit of over £1k in December. I explained this to my broker but apparently the lender is focusing on the weeks where the rent account is showing as being in arrears!

abbiesmom

I can't really help with your query but have noticed that my rent account is now on my credit file with two 1 month late marks on there 12 months apart and this is also due to being entitled to housing benefits due to childcare costs.
It does seem incredibly unfair as my payment is always on time by monthly DD and the only reason anything could be late would be due to HB being paid in arrears. Like you, I will also be hoping for a mortgage in the near future and will watch your post with interest as it appears we are both in a similar situation.
Is your rent account being reported to the credit files too or have you just obtained a statement from your landlord?
Maybe your benefit letter which states that it's paid in arrears will be proof enough?

JohnnyWelsh

I'm going to my housing association today to see if they can write a supporting letter for me.
You might find that this wouldn't be an issue for some lenders but in my case, this is the only lender that would work with me unless I wait 2 and half years.

ACG

Can you not get a letter from your landlord explaining that the full rent has been received every month for the last 12 months?

If not, your broker needs to go back and tell them they can not get what they need and ask what else (if anything) can be used. If nothing, then you may need to look at putting it off for a while if Magellan are the only option.

We do a lot of adverse mortgages, this sort of thing is something that is more common in that part of the market (compared to normal lenders). If your broker is relatively inexperienced in the adverse world, it is probably something they were unaware of - I realise that does not help but no doubt he/she will learn from it for the next one.

JohnnyWelsh

ACG, it would appear that my broker is inexperienced with adverse applications. He came highly recommended through my friends and his fee is cheaper that what other adverse brokers were charging. In hindsight, it'd have been better to pay more for someone who knew what to do to get a positive outcome.
I've spoken with my housing association and they're happy to write a statement explaining that housing benefits are paid in arrears. This information could be found with a quick Google search though. I think what my broker is wanting is housing benefit to write a letter specifying that they're the reason for the arrears-this is something they won't do. I've emailed the broker to speak to the lender and see if there's anything else they'd accept. I could get a letter from my children's nursery stating that all fees have been paid in advance since the children have been attending. I know it's a long shot but I'm desperate.

ACG

Housing benefit will not say they are the reason for the arrears as that opens them up to a claim.

Maybe if your housing association put rent is paid in arrears hence why it shows as arrears but all payments have been made on time, that should do the job. It literally needs to be 2 sentences on letter headed paper.

JohnnyWelsh

I will try that. This is temporary accommodation and they want me to move out as I've refused an offer of permanent accommodation so perhaps this would influence how far they're willing to help. Thanks so much for you advise. It's much appreciated.