Mortgage application about to hit the skids?

[Tabitha005]

Hi all, any advice or similar experiences gratefully received.

We're applying for a mortgage (with Santander) and the underwriters have flagged up something on one of our bank statements that I completely forgot about.

Husbands first marriage collapsed in 2006 and his first wife walked out leaving him with around £45k-worth of consumer credit debt (essentially it was mainly credit cards and storecards that she'd taken out in his name, with her as a named card holder. Husband, daft as he was back then, just signed the agreements without question.

Anyway, three years ago having paid off the 'full' amount of debt (negotiating some lower settlements along the way), it then came to light that there was a further amount owing to Barclaycard of almost £9k. It took over nine months for Barclaycard to prove the debt and supply copies of the original statements. I have no idea why this debt wasn't 'discovered' earlier except to say that my husband is crap with paperwork and financial administration and I look after all of our money.

Anyway, the Barclaycard debt, having been purchased by a collection company, turns up three years ago and after Barclaycard proving the money was definitely owed, husband starts paying it back at a nominal amount each month, with the intention to settle it 'at some point'.

We then apply for our mortgage, via a financial advisor, and Santander flag up this £20 a month and want to know what it's for. The debt doesn't appear on husband's credit file and I'd basically forgotten all about it.

The financial advisor asked me to give as much info as possible on the debt and how it came about, which I did, and the response has now gone back to the underwriters for their consideration.

We're taking out a relatively small 95% mortgage which is around £150k less of what we could, technically, borrow based on our earnings.

My question - and apologies for being long-winded, but I think the previous information is pertinent - is what are the chances Santander will turn down our application on the basis on this debt? They previously gave us a agreement in principle.

Also - if a debt isn't recorded on any credit files, is it still deemed as 'adverse credit' by lenders?

Anyone got any similar experience or industry experience on this?

where does it say the money goes on the bank statement

It says 'Lowell Financial' on the bank statement.

It will depend on this and your affordability score. Outgoings divided by income times 100. If you have been paying it regularly, have a decent credit score and a low affordability then you should be ok.

I'm amazed that doesn't show up on your husbands credit check. that's exactly what a credit check is for. Have you actually seen your husbands credit file?

I don't see how they will lend you money with an outstanding debt to be honest. How long would it take you to pay it off and then re-apply?

When is this debt from and when did the account default? I ask because you state your DH and ex split in 2006 and she left all this debt, if it only reappeared 3 years ago, it may actually be statute barred (look into that as it may not be enforceable). It won’t be on his file anymore as defaults fall off your file after 6 years whether they are settled or not.

In terms of the mortgage application....who knows, be honest and hope for the best. I have an old debt I have been religiously paying off for years that has long since fallen off my file, which was flagged up on our mortgage application earlier this year. I was asked who the original creditor was and how much was outstanding and provided the information. Mortgage approved no problem. Best of luck.

9k at £20 per month?

The maths doesn't add up.

We got a large mortgage two years ago with several outstanding debts, they were being regularly paid off (previous relationship of my dh same as your situation) and credit history was good so they were not concerned at all.

We had the same. I was on a payment arrangement of just paying a nominal amount on an old debt and applied for mortgage. As the debt was over six years old it didn’t show on the credit file so I thought I didn’t have to disclose it. The bank then noticed the payment on our bank statement and flagged it and i explained what it was but honestly thought they would turn us down, but they didn’t. So fingers crossed you will be fine.