Car insurance renewal at mortgage completion

kliuhkirsty

Hi, 
I have a mortgage offer with Barclays issued in Apr, due to complete on the buying of a new build next week but my car insurance which i do monthly renewed in 3 weeks ago. They have marked it on my credit file as a new credit application and ' loan' so it now looks like i've taken out new credit. it's 2k, so frustrating as it is with the same provider and only £20 a month more on the payments to last year. but it's fact they have added it to my credit file when im about to complete on a house purchase. 

Is this now going to effect me negatively? will Barclays check? 

KSS1991

Are you sure it's marked as 'LOAN'? I am no expert but in between mortgage offer and completion I have also renewed my (monthly) car insurance and bought a house insurance too. I think as long as it's not an actual 'loan' or high value credit card you will be fine. In theory your car insurance payments have already been taken into account when they were doing your underwriting. We are completing on the 28th of June though so hopefully no more checks will be done!

kliuhkirsty

It’s flagged up as “ new credit application” then says new loan application taken. 

It’s just frustrating I’ve done it the same way for years and just so happens this company reports it to your credit file. 

That’s what I’m hoping, the monthly payments are only £10 more than now and its not like it’s actual credit I’ve not taken out a credit card or loan of cash as such. 

Just having a panic as it knocked my score down and the alerts make it look like I’ve gone and got a new 2k loan to spend. When it’s just a need of car insurance. 

I’m hoping they don’t check, does say “all checks are complete at offer stage on the lenders site” so hopefully they don’t do another one or can clearly see it’s insurance and it’s all ok. 

DullGreyGuy

KSS1991 said:

Are you sure it's marked as 'LOAN'? I am no expert but in between mortgage offer and completion I have also renewed my (monthly) car insurance and bought a house insurance too. I think as long as it's not an actual 'loan' or high value credit card you will be fine. In theory your car insurance payments have already been taken into account when they were doing your underwriting. We are completing on the 28th of June though so hopefully no more checks will be done!

The OP says they are paying monthly and so it is a loan... some are very formally a loan because brokers use a finance house whereas with direct insurers its not as formal as the insurer provides the credit themselves.

Some will do other searches for the purpose of underwriting rather than for credit in which case this will normally be marked as insurance and most lenders wouldnt care

MWT

kliuhkirsty said:

Just having a panic as it knocked my score down and the alerts make it look like I’ve gone and got a new 2k loan to spend. When it’s just a need of car insurance. 

Your score is completely irrelevant, it is just a synthetic number which isn't used by the mortgage lenders anyway.

It is marked as a loan because it is a loan, but it is replacing a loan you already had and is only £20 more, so unless your affordability was extremely marginal in the first place, this, on its own shouldn't cause you a problem.

Presumably you disclosed the monthly insurance payment in your regular outgoings for the previous year?

kliuhkirsty

No affordability was fine, i have wiggle room. I disclosed this payment already in my outgoings, only difference now it's just fact it's slightly more. 

Thanks - just completely threw me with the evil Experian alerts saying my points had dropped massively and score, making it out like i had taken a 50k loan!

I'm probably worrying over nothing but it's the last hurdle! Barclays site does suggest they only check up to offer stage too, but how true this is i don't know.  

KSS1991

When is your completion? Keep us up to date how it goes

kliuhkirsty

It’s next Friday.(30th) My broker said they had confirmation from the lender they are releasing the funds. 

Not sure if that means they have sent to across now to the solicitor ready or if they mean they are confirmed to do it on that date. 

KSS1991

So we are completing tomorrow and the lender has just sent the funds to solicitors today - they have not done any further checks at all. Good luck!