FTBs Nationwide - 1 adverse account

Emmajc11

Hi guys, apologies in advance for the long post.

Was hoping to get some advice or to hear from people that have been in a similar situation?

both partner and I are FTB's, offer accepted on a house and we've chosen to use nationwide on the basis that they are running the 95% mortgages without the the government guarantee scheme and we fit their eligibility criteria. We have a 8% deposit and AIP accepted

Offer was accepted just before Xmas closures so we have only managed to appoint a conveyancer & give necessary paperwork to estate agents, we haven't yet begun our mortgage application.

My credit history is clean, never missed any payments, no loans, debt etc. I have minimal outgoings and a credit card with £300 balance which will be paid off fully before our application is put in. 

My partner earns more than me (almost 30k, I'm almost 20k), has a loan (no missed payments on this - only a couple 1000 outstanding) he also has a payment plan in place for an old debt with Lowell and has been paying this off for many years, never missing payments since agreeing payment plan etc. this does not shows on any of his credit reports at all, not sure if it's due to being an old debt. 

We spoke to Nationwide about this as it wasn't really an option to include this payment plan when filling out the AIP and we didn't want this to affect our possibility of acceptance, they said it's fine, it shouldn't cause too much issue down the line.

Anyway, we have taken the xmas break as an opportunity to gather paperwork ahead of applying for our mortgage and my partner found an unopened letter from Lowell finance (he thought it was a pension letter so never opened it), this being for an outstanding water bill from an old place he rented. this is completely unrelated to the payment plan he already has in place and is currently paying off. 

This had him confused as there have been no further letters regarding this debt, this letter was dated 2019 offering a discount if settled by a certain date. As he never paid the water bill on his last rented property, his ex did, he's not sure how this is in his name at all.

This missed payment does not show up on Experian, credit karma or clear score so it wasn't something we ever picked up on when checking scores etc. however we signed up for check my file and we can see this has been listed as 1 adverse account, opened in July 2014. Now this also shows as closed in 2017, but Equifax show this to be "satisfactorily closed"and trans union show this as closed  "partial settlement".

As this is showing closed 2017 but a letter regarding this was sent in 2019, he's going to ring them (when they are open again) to confirm the current status ahead of putting in our application, if this is still outstanding he'll just pay it off there and then.

My concerns are though, how badly is this all going to affect us when applying for our mortgage? I wasn't too worried when it was just a payment plan to declare, but now that he has this is showing on his credit file, I have this horrible feeling we aren't going to get very far with our application, especially with our 8% deposit, I feel we need a pristine credit history.
 

He only has the one adverse report on his credit file, no ccjs etc everything else is fine and he's paid everything on time ever since. 

As the adverse credit was opened 2014 and is for a water bill (£290) how bad will this look? As some years have passed with no further issues, will this better our chances? (credit report states this will be present on account until 2023)

I would ideally like to continue our application with nationwide as we have jointly agreed very early on we feel this is our best bet...but now this adverse account has come to light, I'm not sure how badly this will affect our chances, or if we should have just gone straight to a broker rather than nationwide. 

Sorry for the ramble. Navigating all of this for the first time and overthinking to the extreme, we are both very stressed and we haven't even really started! we just want to be sure we are doing things right.

Many thanks in advance

ACG

I think you have 2 problems:
1) When they do the full credit check, if they pick up the arrears you may struggle to pass the credit check when you make the full application. 
2) When they get your bank statements and they see lowell, they will know what it is. 

On the application form it will ask about monthly commitments, you can put this down as an expense. 

I think you might struggle to get this through with nationwide. I do not use Nationwide massively so I could be wrong. But 95% LTV is as high as you will get. Nationwide are not exactly the most relaxed lender so at 95% LTV I think could be a tough ask. 

Emmajc11

ACG said:

I think you have 2 problems:
1) When they do the full credit check, if they pick up the arrears you may struggle to pass the credit check when you make the full application. 
2) When they get your bank statements and they see lowell, they will know what it is. 

On the application form it will ask about monthly commitments, you can put this down as an expense. 

I think you might struggle to get this through with nationwide. I do not use Nationwide massively so I could be wrong. But 95% LTV is as high as you will get. Nationwide are not exactly the most relaxed lender so at 95% LTV I think could be a tough ask. 

Hi, Thank you for your response.
That is my concern, being our first time through this process, it's all confusing and we want to give ourselves the best chance...As we haven't yet submitted a application, I'm not sure if it's best to reevaluate and go through a broker.

csgohan4

Emmajc11 said:

ACG said:

I think you have 2 problems:
1) When they do the full credit check, if they pick up the arrears you may struggle to pass the credit check when you make the full application. 
2) When they get your bank statements and they see lowell, they will know what it is. 

On the application form it will ask about monthly commitments, you can put this down as an expense. 

I think you might struggle to get this through with nationwide. I do not use Nationwide massively so I could be wrong. But 95% LTV is as high as you will get. Nationwide are not exactly the most relaxed lender so at 95% LTV I think could be a tough ask. 

Hi, Thank you for your response.
That is my concern, being our first time through this process, it's all confusing and we want to give ourselves the best chance...As we haven't yet submitted a application, I'm not sure if it's best to reevaluate and go through a broker.

Broker all day, they will know which lender will suit your circumstances. Best to do it properly the first time as multiple AIP/applications may leave footprints on your credit file

london21

You will need a broker. 

90% LTV might have a better success rate.

Too late but tell your partner to be opening all letters. Don't assume you know the content.

Emmajc11

Thanks guys

We've managed to up our deposit to 10% and we are currently in early talks with a broker

fingers crossed!