Is honesty the best policy?

Bungle_Bonce

I am in the process of moving in with my partner who has about £50k outstanding on her current mortgage. We are looking to increase that by £30k and the property is worth £250k. She has been out of work for a short while and so the bank can only offer us the extra based on my income which more than covers what we want.

The problem i have is that i have had bad history up until 2004 when my last debt was settled, no ccj's but i bit off more than i could chew when i was younger and had about £9k of debt through loans, store cards & credit cards. I lost my job in 1998 and then put my finances in the hands of a profit making DMC. I eventually took my remaining debts back in 2002 and paid everything off. This does show as a problem through Equifax. I have seen my report through Experion and Call Credit, which come out quite well. We are intending to go with Nationwide as that is where my partners current mortgage is. We have a joint current account that we have both been paying money into from our seperate current accounts, which is helping me get a bit of customer history with Nationwide. I see from MSE that Nationwide only use Experion as a referncing agency and not Equifax, so i should be ok. However, should i declare my problems on the mortgage application form, where at least i am being honest but i also run the risk of them turning me down? Or do i stay quiet about my history and hope they dont spot any previous problems?

I have good electoral roll & court history. No CCj's, but i also have no search history as i have always been concerned about being turned down and affecting my ability to get a mortgage in the future. I do have a credit card which i pay off in full every month, a steady job earning a decent salary, landline & mobile phone agreements.

I suspect that a low mortgage which works out as less than 50% of the property value puts us in a good position, but any advice or help would be appreciated.

Ta

MortgageMamma

YES, you must disclose your credit history - it looks much worse if you don't and its subsequently discovered. Usually to obtain a mortgage with Nationwide you have to have clean credit - the only way to find out is to try - if your girlfriend is still within the early repayment charge period it might be a problem moving to another lender, and if she is no longer employed they wont remortgage her on her own.

Do you know you have to arrange a transfer of equity?

Bungle_Bonce

Her fixed term was for 5 years, which ends in March, so we can apply for a further fixed rate during January. We have the forms to fill in for transfer of equity.

So you think it may be difficult for me to be approved for the additional mortgage with Nationwide based on the info above?

NeilQuinn

The fact that you both have a relationship with Nationwide will score you plus points. The fact that everything is paid off will also be a help. It's definitely worth a go....especially if there are no CCJ's.

Stuff like paying your credit card on time, steady job, low loan to value.....all stacks in your favour as well. The problems were also quite a while ago & it looks like you've been clean since. I think you'll be okay. Depends on whether "Computer says No".

MortgageMamma

Nationwide are perhaps the worst lender for flexibility where past credit problems are concerned, but I think you should give it a go and see what happens. However if you are declined by Nationwide please do not approach any further lenders direct, seek professional advice as too many credit checks can damage your credit rating further which then becomes a catch 22 situation. I don't think you necessarily need an adverse credit mortgage - its just that there are plenty of high street lenders who are a bit more understanding with these things.

Bungle_Bonce

Thanks for all your reply's, we are going to go for it with Nationwide and hope for the best.

On the Transfer of Equity form it asks for full details of any creditor arrangements. I have to put this info on an Additional Comments page.

What info are they after? I have in mind to write a paragraph explaining my situation and what caused the problems, basically my opportunity to plead.

I also feel its probably best to give details of each individual debt i had and how much i owed at the time.

What are the do's and don'ts for this information? Any help would be appreciated.

MortgageMamma

are you taking advice from a solicitor on this?

Bungle_Bonce

We have spoken briefly to a local solicitor about handling the legal side of the transfer of equity, safeguarding my partners profit in the property etc.

We haven't had any advice with regards to my financial history.

Mortgage Mama, as a mortgage advisor, in your experience do you know what information is required when declaring credit history problems. Do i need to name the creditor, the amount owed at the time etc, or just give a brief outline of what my problems were?

MortgageMamma

well it depends on the severity of the problems but the more information you give your lender the better

if you go to this link http://www.nationwide.co.uk/intermediaries/stock/printForms.htm

it will take you to the nationwide website and there will be a mortgage application form PDF. If you print it off you will see the exact details required. Also on their is nationwides lending guide, but this is designed for intermediaries such as myself so do be aware of that when reading it.

Hope that helps a little. In my experience nationwide are the strictest of all lenders when it comes to credit assessment, but as you have bank accounts with them and your girlfriend has a good payment history this could work in your favour. Have you checked what sort of a deal you may be offered through an intermediary as opposed to a nationwide branch?