Does wiping out debts through Appealing affect my chances at getting a Mortgage?

WillowDingle

I have 3 depts:
HMRC late filing fees (I do not owe any taxes, and I have now completed my self assessments)
Energy bill
Student loan

I stand a reasonable chance to clear my HMRC late filing fees, and potentially reduce the amount I owe to the energy company who has sold the case to a dept agency. The student loan situation is currently foggy, and I haven't begun poking that bear, but I never got to finish a single year of college because of my "extenuating circumstances" (I would prefer not discussing those here).

So the question is: would reducing or wiping out my debts through appeals hurt my chances when applying for a mortgage which I will eventually have approx. 20% deposit saved and several thousand for extra fees etc.

Thank you! 

Hoenir

Underwriters will consider the facts presented to them at the time of application in arriving at their decision. .  

DE_612183

have any of the debts resulted in CCJs?

MWT

WillowDingle said:

I have 3 depts:
HMRC late filing fees (I do not owe any taxes, and I have now completed my self assessments)
Energy bill
Student loan

There are two separate issues here, one is the debts the other is your credit report, but matter for different reasons.

For your credit report use a service like 'Checkmyfile' which has a free period, and take a look at what events are on your report. These are the things that any lender will look at to see how you have managed credit in the past.

If the events on the file are accurate then you will not usually be able to get them removed, so for example, if you were late paying an energy bill then even when it has been paid in full, the fact that it was late remains on your file.

If something is on there which is not accurate and you are able to get it removed then it will be gone completely.

For your debts, what will matter is the amount that is outstanding at the time you apply for a mortgage and what you say you will be doing about them. So if you commit to pay them off before you draw down the mortgage then the lender will typically ignore them, or if you do not intend to pay them off yet just declare them and the lender will factor them in to your affordability calculation.

Regarding the 'Student Loan'. without going into any details, if you started a course then as a minimum there will have been course fees and whatever portion of the loan had been advanced to you for maintenance etc. so it isn't predicated on finishing anything, it is about starting...  

HobgoblinBT

I would say that it won’t help you get a mortgage unless you can pay them off in full. 

 

 From a lender’s perspective you have failed to meet past financial obligations to the point that they have been deemed bad debts.  Not only that but you are proposing a scheme whereby you are trying to appeal them (from a lender’s perspective get out of paying them).    Would you see someone who does that as a good credit risk?