Remortgage application with previous defaulted lender

BeingDebtFreeStartsHere

Advice welcome,

We are using a broker and they have come back that Natwest are offering the best deal for us for a 5 year fixed mortgage.

I have informed the broker that we previously defaulted on a loan with Natwest in 2015. This was sold on to PRA in 2019 and dropped off our credit file in 2021.

The broker assured me that as the default is over 6 years old it won't be an issue when it comes to our Natwest application so this has now been submitted.

I just wondered what anyone's thoughts on this are, as it is making me anxious as to whether this is going to be a wasted application.........

simon_or

I remember brokers on this forum saying that Natwest bank does not like applicants who have had previous defaults with them, even when they are more than 6 years old as they have internal records that go further back.

Not all banks have the same approach. I have had old defaults with Halifax and many years later got a mortgage with Birmingham Midshires which is part of the same group.

But if the natwest application has been submitted successfully, that means it's not been automatically declined by the system. And if it's the cheapest rate, there no harm in giving it a try.

ACG

My understanding is that if Natwest have ever had to write off a penny (whether that be a mortgage, credit card, loan or overdraft etc), it will be an automatic decline. 
It could have changed but I would be surprised. 

BeingDebtFreeStartsHere

I feared as much. So not looking very promising............

Would the application be declined pretty much as soon as it had been submitted?? What would be the impact on our credit file - would they get to the stage of doing a hard search or just come back with a 'no' before going any further?

Just worried now as if the hard search is carried out how likely is this to impact us if we apply for a deal with another lender??

bamgbost

i agree with @ACG, as a student i had a natwest credit card. It defaulted. and i had to take them to an ombudsman, and the default was revoked in my favour. As it had been unfairly applied. I thought happy days, that was the end of it.

However many years later ( 7 or so). i have approached them for a mortgage, was declined within minimal information. Wrote to get an understanding why, based on freedom of information request, and essentially wrote back stating, they will never offer me a product in future based on past history with them.

So going forward will never waste my time with natwest or associated banks with loans, mortgages, etc.

silvercar

Seems to me that your broker should have been aware of this, judging from the comments of others.

BeingDebtFreeStartsHere

Thanks everyone - is this likely to have scuppered our chances to apply with another lender?

housebuyer143

BeingDebtFreeStartsHere said:

Thanks everyone - is this likely to have scuppered our chances to apply with another lender?

I don't think so. A hard search isn't that bad unless your credit history is really bad which yours doesn't sound like it is.

ACG

I think you need to find another lender.
I think (again, its been a little while since I have had it crop up) it gets flagged at DIP stage so would be before the hard footprint but dont hold me to that. 

A one of hard footprint is not going to be a deal breaker, or at least shouldnt be. 

BeingDebtFreeStartsHere

ACG said:

I think you need to find another lender.
I think (again, its been a little while since I have had it crop up) it gets flagged at DIP stage so would be before the hard footprint but dont hold me to that. 

A one of hard footprint is not going to be a deal breaker, or at least shouldnt be. 

Is it worth finding another broker too or should I see what they come back with as an alternative first?

ACG

Your presumably buying a home. It can be stressful, I imagine the stress levels are higher if you have doubts about your broker. My advice on here is to find a broker you like and trust. 

Do you think it is worth a conversation with them? If you have lost faith, then yes knock it on the head and find a new broker. If you still think they can help then carry on.