Will reclaiming bank charges affect applying for mortgage?

moatfarm

I’ve been considering claiming back bank charges from years ago but I’m hesitant as I’d like to apply for a mortgage in the next two years. Im concerned that if I’m successful at reclaiming, this have a negative impact when I come to make a mortgage application. I have been in a much better financial situation recently where I can manage my money better so I wonder if it’s worth flagging up problems I used to have years ago. Does anyone have any experience with reclaiming close to a mortgage application? Did this cause any issues? 

[Deleted User]

You can't reclaim bank charges, but if you're in current financial hardship, your bank may be able to offer some support.

However, if you're in current hardship, it wouldn't be the best time to consider a mortgage.

dunstonh

Will reclaiming bank charges affect applying for mortgage?

If you meet the criteria for them to consider refunding charges then you pretty much have no chance of getting a mortgage and really shouldn't be considering taking out a mortgage.

 I have been in a much better financial situation recently where I can manage my money better so I wonder if it’s worth flagging up problems I used to have years ago.

If you are not in current financial hardship, then you do not meet the criteria for them to consider whether you should have a goodwill gesture refund.  I'm not sure if you are aware but the banks won the reclaiming court case in 2009.  Since then only current financial hardship cases or incorrect charging have been considered.

moatfarm

I understand what your are saying, however without going into too much detail, I’m self employed but have been on benefits the last couple of months due to COVID, which have meant I’m currently ‘technically’ In hardship. I will be restarting the business again soon and project I will be able to afford a mortgage in the next couple of years. I’d rather not go into all the details but I currently meet the criteria due to the COVID times we are in temporarily, however I will be in a position to get a mortgage in the next few years. 

So my question still stands as to whether any knows if it will impact on my mortgage application? 

IslandLife

Why don’t you give your bank a call and ask them? Probably better than peoples opinions and they will know your financial situation better. Take care 

moatfarm

Yes I was planning on doing that but I also wanted to hear from people’s experiences who have gone through the process, although I realise people like to comment their opinions. 

dunstonh

The actual reclaiming attempt can harm you with the bank you are with as you are drawing attention to yourself and your claim of hardship.     Hardship cases don't just involve a refund of recent charges (typically less than the last 12 months).    Often they do not refund a penny but look at alternatives.  Such as suspending future charges for a period or putting you on a debt management plan.     A bank isn't going to give you a mortgage if you are on a debt management plan or had other hardship remedies recently put in place.    Being in hardship frequently means having priority bills going unpaid (i.e. direct debits bouncing).  These will be the things that are doing the damage.  Not the actual attempt.

However, if you are no longer in hardship at the time you apply for the mortgage and you can meet their criteria at that point and have been clear of bounced items for a while then it won't be an issue.

Brie

In my opinion it would depend on why the fees are being refunded.  If it's "merely" due to current hardship I think previous posters are correct in how that might affect a future mortgage application.  If, however, it is due to bad practices on the bank's part - there's been a decision that the fees were recognised generally as being too high or otherwise unreasonable - then that's something that they should do without any impact to an application.