When is it worth appealing a mortgage decision?

Raffi2020

Hey Guys,
Will try and keep this brief. Long story short; going through a broker, got an AIP for a joint mortgage despite me having pretty bad credit history (3 defaults from 4 years ago, two unsatisfied) but it got declined at full application as I'm in a DMP for the defaults (I was totally stupid and didn't realise I was in a DMP - thought that was a different thing to simply paying back the debts, idiotic I know...). Other than that it looks like the mortgage is good on affordability and everything else. 

The broker is going to chat with the lender as soon as possible and see what can be done regarding an appeal or other options, but I wanted to sound out some experienced input from here in the meantime. I can likely pay off these debts in full in the next few days, and basically have nothing outstanding, but would that be grounds to appeal or is it likely the damage is already done? Just trying to weigh up what, if any options, we have going forward. I know ultimately it's only our broker and the lender that's going to know what's what - but figured some of the brokers and advisers on this forum might be able to give some input as to what to expect to hear back!

Thrugelmir

I noticed on another thread that you are repaying £20 a month off a £2k debt.  This reflects on you and your attitude to money management. The underwriter will be factoring such matters into their decision. 

Raffi2020

That was the minimum payment, I have actually been paying more - though I appreciate what you're saying. 

NannyPlum89

Raffi2020 said:

Hey Guys,
Will try and keep this brief. Long story short; going through a broker, got an AIP for a joint mortgage despite me having pretty bad credit history (3 defaults from 4 years ago, two unsatisfied) but it got declined at full application as I'm in a DMP for the defaults (I was totally stupid and didn't realise I was in a DMP - thought that was a different thing to simply paying back the debts, idiotic I know...). Other than that it looks like the mortgage is good on affordability and everything else. 

The broker is going to chat with the lender as soon as possible and see what can be done regarding an appeal or other options, but I wanted to sound out some experienced input from here in the meantime. I can likely pay off these debts in full in the next few days, and basically have nothing outstanding, but would that be grounds to appeal or is it likely the damage is already done? Just trying to weigh up what, if any options, we have going forward. I know ultimately it's only our broker and the lender that's going to know what's what - but figured some of the brokers and advisers on this forum might be able to give some input as to what to expect to hear back!

Are you using a third party such as Stepchange for your DMP, or are you paying the creditors directly yourself?

ACG

Does the lender accept DMPs or satisfied DMPs? If they do, then no harm appealing. 
If they do not, then you have no chance. Appealing can work but you have to be a good case and it needs to be asking them to bend their rules slightly not breaking them.

Raffi2020

NannyPlum89 - Paying the creditors directly, which is why I naively thought it wasn't a DMP (foolish I know, I just presumed a DMP was  specifically a StepChange-style management of defaulted debts). 

ACG - The lender is Halifax - no idea what their current policy is on DMPs but think they've been flexible in the past based on what I've read on here, though it's obviously strange times at the moment. Our broker hasn't really given us any indications, she simply said she'd talk to the business assessor as soon as possible. 

My instinct is it's unlikely but I've read Halifax can be curious with their lending, and everything else was in order, so figured it'd be worth finding out from others who might have been in similar situations or deal with this sort of thing regularly. 

NannyPlum89

Raffi2020 said:

NannyPlum89 - Paying the creditors directly, which is why I naively thought it wasn't a DMP (foolish I know, I just presumed a DMP was  specifically a StepChange-style management of defaulted debts). 

ACG - The lender is Halifax - no idea what their current policy is on DMPs but think they've been flexible in the past based on what I've read on here, though it's obviously strange times at the moment. Our broker hasn't really given us any indications, she simply said she'd talk to the business assessor as soon as possible. 

My instinct is it's unlikely but I've read Halifax can be curious with their lending, and everything else was in order, so figured it'd be worth finding out from others who might have been in similar situations or deal with this sort of thing regularly. 

Halifax has done exactly the same to my friend this week; she is paying £200 to a debt collection agency to repay a historical overpayment of housing benefit. Her broker is trying to argue that its not a DMP as she didnt go through Stepchange etc. Unfortunately the broker isn't hopeful of a successful appeal and so she's looking at alternative lenders.

Raffi2020

NannyPlum89 said:

Raffi2020 said:

NannyPlum89 - Paying the creditors directly, which is why I naively thought it wasn't a DMP (foolish I know, I just presumed a DMP was  specifically a StepChange-style management of defaulted debts). 

ACG - The lender is Halifax - no idea what their current policy is on DMPs but think they've been flexible in the past based on what I've read on here, though it's obviously strange times at the moment. Our broker hasn't really given us any indications, she simply said she'd talk to the business assessor as soon as possible. 

My instinct is it's unlikely but I've read Halifax can be curious with their lending, and everything else was in order, so figured it'd be worth finding out from others who might have been in similar situations or deal with this sort of thing regularly. 

Halifax has done exactly the same to my friend this week; she is paying £200 to a debt collection agency to repay a historical overpayment of housing benefit. Her broker is trying to argue that its not a DMP as she didnt go through Stepchange etc. Unfortunately the broker isn't hopeful of a successful appeal and so she's looking at alternative lenders.

Yeah I figured as much! That's my argument too - I didn't think it was explictly a DMP, although I understand in a roundabout way it doesn't matter, a plan to repay your debt is a DMP whether it's called as much or not. It's just disappointing as I stupidly presumed a DMP would be a more formal plan with someone like StepChange, so it's a shame to find this out now.

I think we'll have to look at alternative lenders too. It sounds like there's no shortage of applicants at the moment, so Halifax are not desperate to make things work. 

Thrugelmir

Raffi2020 said:

That was the minimum payment, I have actually been paying more - though I appreciate what you're saying. 

Focus on settling your debts as soon as possible. That way you can draw a line under past and slowly move forward. Treating old debts as an interest free loan may seem like a good idea at a personal level. Lenders will take the polar opposite view.  People get into financial difficulties for all sorts of reasons. Time does heal credit records. The better the credit history you have the greater the number of doors that will open. Make your own good fortune. No one else can for you. 

Raffi2020

Thrugelmir said:

Raffi2020 said:

That was the minimum payment, I have actually been paying more - though I appreciate what you're saying. 

Focus on settling your debts as soon as possible. That way you can draw a line under past and slowly move forward. Treating old debts as an interest free loan may seem like a good idea at a personal level. Lenders will take the polar opposite view.  People get into financial difficulties for all sorts of reasons. Time does heal credit records. The better the credit history you have the greater the number of doors that will open. Make your own good fortune. No one else can for you. 

True words! Well I'm hoping to settle them in the next week. The question is whether that's going to make a blind bit of different at this stage!

Kiwistrawb1990

Had this exact problem. I had a 4 year historical £200 default that I paid off. The underwriter believed it to be a DMP and we were declined. We appealed. It was rejected.
We have a mortgage with Natwest and have been in our house now since the summer. Don't bother appealing.