Credit card default and mortgage

FlorayG

Asking here for a friend, but I think she's just burying her head in the sand and refusing to consider how to get out of her massive CC debt. She says if she defaults the CC companies will contact her mortgage provider and as she's on a slightly dodgy deal (she moved into her BTL flat a few years ago but still has a BTL interest only mortgage on it and didn't tell her mortgage company she had moved in) she says the mortgage company will cause her grief
I don't think the two have any connection. What's the truth, please?

13thlegion

CC companies will not go snitching to mortgage providers. Even when the same company they won't tell the other department. A mortgage provider will be able to see defaults on a credit file if trying to change to a different provider when deals are up. The usual advice here is to lock in a new deal with current provider yourself at the time as they won't credit check and so avoids any issues.

Sounds like your friend has much more serious issues that are mortgage related separate from the CC.

FlorayG

13thlegion said:

Sounds like your friend has much more serious issues that are mortgage related separate from the CC.

Yes she does and I'm just providing the information so that when/if she's ever ready to take control of things she will know where to start
She's terrified of being made homeless. 

MEM62

FlorayG said:

13thlegion said:

Sounds like your friend has much more serious issues that are mortgage related separate from the CC.

She's terrified of being made homeless. 

And, in not addressing her situation, she is taking the course of action that is most likely to make that happen.  Doesn't make sense, does it?  

ManyWays

Well the CC lenders wont contact her mortgage lender, they wouldnt gain anything from that. But what mortgage fix rate is she on and when does it end?

FlorayG

ManyWays said:

Well the CC lenders wont contact her mortgage lender, they wouldnt gain anything from that. But what mortgage fix rate is she on and when does it end?

I don't know and that isn't relevant to my question

ManyWays

It is relevant because if the fix ends soon then the lender will check her credit record. A BTL isn't a normal consumer mortgage where the lender will always offer a new fix without credit checks, in this case, she no longer qualifies for a BTL, so would have to pass affordability checks for a normal repayment mortgage. 

FlorayG

ManyWays said:

It is relevant because if the fix ends soon then the lender will check her credit record. 

So, leaving aside the other complications, will a credit check that shows she defaulted on credit cards mean she won't be able to remortgage? This is what she is saying and I just wanted to check if its right

ManyWays

Her ability to remortgage on to a good rate will depend on her affordability, thats why I asked what rate she is paying at the moment. Otherwise she may be paying a very unpleasant SVR to the mortgage lender, really she needs to talk to a good broker about her option.

FlorayG

ManyWays said:

Her ability to remortgage on to a good rate will depend on her affordability, thats why I asked what rate she is paying at the moment. Otherwise she may be paying a very unpleasant SVR to the mortgage lender, really she needs to talk to a good broker about her option.

but my question is, will defaulting on her CC affect this?

CliveOfIndia

FlorayG said:

but my question is, will defaulting on her CC affect this?

Putting aside any considerations of affordability, and the issue of BTL vs a standard residential mortgage - yes, if the mortgage lender performs a credit check.  There are many, many factors that are taken into consideration by any lender, but they'll be able to see the defaults on her credit file, and these defaults will be factored in.

Each lender has different criteria, and will quite likely assign different weightings to the default(s).  But yes, they'll be able to see them, and it will have an effect, to a greater or lesser extent.