Barclays ruined my credit rating!

Purplegold13

Hi, I wonder if this has happened to anyone else out there.

I have had an interest only mortgage for 25 years, I took it out with Woolwich, and in 2023 Barclays starting asking for more money to cover my Mortgage Current Account? I didn't know, and still don't really know what that was. I made three payments, but they were a little late, and then I paid off the £40k for that account so that it did not happen again.

Coming to the end of the term, we want to stay in the house for another 5 years, so asked Barclays if I can continue paying (have NEVER not paid the mortgage, plus always made overpayments EVERY month) They say no.
I tried other lenders, Barclays have black balled my credit rating saying that I have missed payments, so NOBODY will extend my term.

I complained to Barclays, and asked why 24.5yrs of over paying can be overruled by 3 late payments on a CURRENT ACCOUNT and now I have no chance of getting any remortgage. They just didn't care.

How is it right that Barclays can just take my house back in 3 months time when all I want to do is keep paying to stay there?

I took them to the Financial ombudsman, but they found in favour of them!!!

Any help would be really appreciated.

Thank you so much.

mebu60

I took them to the Financial ombudsman, but they found in favour of them!!!

Might be helpful to share the findings and reasoning behind the decision.

freesha

Did you not ruin it yourself with the 3 late payments?

Purplegold13

It was late payments on a Current account, NOT my mortgage! I still paid, but for some reason after 23 years the amount has changed. I have never had any correspondence about it previously.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/81897595#Comment_81897595

As I understand it, A mortgage current account is a borrowing facility directly linked to your mortgage. If you borrow using the MCA, missing a repayment is the same as not paying your mortgage.

flaneurs_lobster

If you could post the Ombudsman's decision reference (the DRN number) then it might help any advice to be better informed.

Brie

So does the MCA have a zero balance? And you say the amount has changed. What amount has changed? Is there a possibility that Barclays supposed you wanted to extend the interest only mortgage for 5 years which is what the issue is or will they consider you for a regular mortgage at current rates? I thought that banks had to do that at the very least - but maybe the rules are different when it's an interest free mortgage originally.

Have you looked at your credit history for anything else? If you paid off the MCA say 20 years back I don't know if that would still show on a credit history so I have doubts that other banks could see that as an issue. Maybe there are other things that are preventing them from lending you money.

Ultimately how did you intend to pay off the mortgage? Can you activate that plan now?

Could talking to a mortgage broker help???

admission - I'm not a mortgage expert in any way so am just considering alternatives.

Kim_13

Whether or not there are any late payments, there is no automatic right to extend an interest only mortgage beyond the term initially agreed. If you are 24.5 years into a 25 year term then they are entitled for the capital to be repaid in 6 months, because you agreed to a 25 year term and not a 30 year term. They can only take the house if you do not redeem the mortage by the expiry of the 25 years originally agreed, in order to sell it and recover the amount owed to them.

What is the amount owed? The £40k you paid sounds as though it would have come off the capital owing, so you'd need to pay the rest in order to keep the house.

When other lenders look to decide whether they are willing to offer a mortgage, they look at your whole credit file. If payments were late, payments were late; it is irrelevant what those payments were for. Rates began rising in 2022 so I suspect what happened was you have paid what you thought was an overpayment without fail, only for that amount to fall short of what was due as rates rose. With anything a previous overpayment cannot be used to cancel out an underpayment later and any month in which the amount paid is below the minimum currently applying will be recorded as an underpayment.

If Barclays had not corresponded to say that the amount was increasing, there would be grounds to have the late payment markers removed - but if FoS have agreed with them this suggests they were able to provide evidence of correspondence or the investigator was not aware that this was the cause of the late payments. Your post here does read that you didn't understand what was going on and so assumed that it must be wrong (causing the late payments) before deciding to just pay it later, without getting to the bottom of what it was all about. The time to query anything is at the time and that you did not do so will be seen as at least contributory to the late payment markers, as you both failed to query it and failed to pay on time.

If your complaint was that Barclays would not extend your term then they would be correct to agree with them since Barclays have no obligation to do so. Barclays refer to it as a mortgage current account so it may be that despite the slightly confusing naming, this was your mortgage - just as those with offset mortgages have a pot attached to the product.

For external lenders, they have six years of credit history to go on only. So they will be aware of the late payments, but not the full 20+ years of faultless history beforehand.

ACG

There is clearly more to this or your not explaining it correctly.

A lender does not just decide to charge you extra payments. They also do not reject complaints and neither do the ombudsman - not to say they get it right 100% of the time, but this does not sound like a correct version of events.

Also there will be other lenders who will consider you, but maybe not the high street.

As a side note, if you carry on paying the mortgage and bringing the balance down, I doubt (cant guarantee) they would take it to court. But you need to speak to a broker to find a lender who can help or engage with barclays to say you want to carry on as is.

Ayr_Rage

"I have had an interest only mortgage for 25 years, I took it out with Woolwich, and in 2023 Barclays starting asking for more money to cover my Mortgage Current Account? I didn't know, and still don't really know what that was. I made three payments, but they were a little late, and then I paid off the £40k for that account so that it did not happen again."

It sounds very much that you didn't understand the product that you had from Barclays.

What is the current amount that needs to be paid at the end of the mortgage term?

What was put in place 25 years ago to repay the capital sum when the mortgage term ends and do you have sufficient funds now to pay that?

Barclays were never under any obligation to extend the term.

born_again

https://forums.moneysavingexpert.com/discussion/6656718/barclays-ruined-my-credit-rating

So can we take it that you have failed to repay the interest only mortgage balance when it was due?

Guessing that is the cause of the 3 unpaid markers.

So it is only a true refection of the facts that the mortgage was not repaid when it was due.