Refused mortgage because of dh - angry!

[madeofhonor]

Hi,

Dh and I applied for a remortgage last week - We are wanting to move to a new location about 10 miles from where we are now. We sailed through all of the affordability checks etc however we were declined which was a shock. I have done some digging and have found that dh has something called an arrangement to pay marker on his credit file. He had a credit card and in 2023 struggled a bit following a health issue that prevented him from earning as much. He called the credit card company and they agreed a reduced payment for about 8 months. The arrangement to pay ended in October 2023, however apparently it will stay on his credit file for 6 months.

I know that he wasn't aware of the consequences, but I am really angry as its completely ruined our plans! Is there any hope?

Just reapply when it’s gone?

It should have gone now then? It's 15 .months ago?

are you sure it is only on for 6 months? Most financial markers are on for 6 years...

go and find a local mortgage broker, they will have access to lots of deals - you may pay a little bit more, but you shouldn't have any issue with that on there as long as the financials stack up in other ways (i.e. enough income to pay the mortgage etc.) - you will struggle applying on your own

Six years. Notes on your credit file drop off after six years.

Just reapply in 3 months time - not really a problem.

You'll need to speak to a mortgage broker who deals with people with bad credit / credit issues. This on its own isn't probably "bad credit" but that sort of broker will know the lenders most likely to accept, although your interest rates might be different!

But you weren't aware either that this would affect his credit rating. It's unfortunate but I don't think you should be furious with him. Either wait till it has expired or seek another lender through a mortgage broker.

He had a health issue. It wasn't gambling or reckless spending. He did what was needed at the time to get through a tough patch.

Sorry It's 6 years not six months. Do you think that the impact of it will decrease even time, even if it's still showing?

I actually didn't know he'd done it or I would have looked into it! That's a whole different thread!

But this is explained at the time if you enter this, it will likely affect credit rating and ability to apply for future credit, and it’s six years?

Speak to a Broker, you may not get as good a deal but they should be able to find you something

Lenders will give it the same weight right up until it drops off. Is there anything he can do now to improve his overall credit score? The credit report will have a few tips.

In his defence, informal arrangements with creditors are still often sold as less damaging than IVAs/bankruptcy, but since the 2007 credit crash many creditors have lumped them all in the same bracket.

A broker will be able to help you find a lender although the interest rate will probably be higher than you’d like.

It is. And I'd unpick that one first.

Oh I have - don't worry. In his defence we do maintain separate day to day finances so I can understand why he may not have asked before doing it

Yes it’s 6 years not 6 months, impact will typically be less after 3-4 years but honestly I’d wait it out because the only lenders who will touch you before then will rip your eyes out in interest rates

I have much bigger credit issues than this and I recently got a mortgage. You just need to find the right lender. I would use a mortgage broker to help. I am not sure if I am allowed to recommend the ones I used on here _ but Google bad credit mortgages and some will come up.

I know it's a pain. But it sounds like he was going through a rough time. Not sure you will gain much by holding resentment, if other things between you are good.

That
You'll have no issues. I used simply adverse and I had defaults and debt

No need to wait it out - it simply needs to go through a broker who will pass it through a human at the mortgage company for underwriting, rather than putting it through the standard black box engine which calculates mortgages for more straight forward cases...

the human will want to understand the why and wherefore of the marker - and will see that it was a short time payment delay (better than default) but will also see that it was due to poor health which presumably impacted earnings. They may well want to understand whether that was a temporary issue / likely to repeat and cause problems paying the mortgage... If it was temporary then there should be no issues in getting a mortgage, you will pay a slight premium, but probably not huge, if though the illness might re-occur then there could be more of an issue, and it might be necessary to put for example a critical illness policy for the OH alongside, so that in the event of not being able to work that will pay out... becomes more complex but still possible - the key is a very good broker to crack on with it asap...

I used to write the underwriting logic engines ;) Ultimately the mortgage company wants to know that it will get paid - in this instance the engine's logic can't say that, so a human is needed!

And yes, there is likely to be a price premium, but probably not much - this is a much better scenario than someone who has been bankrupt / failed to pay / etc.

Did he have a choice at the time or was it his only option?

He probably didn’t understand the implications of the agreement

Have you tried other mortgage providers?

Yep, 2 things to do.

1. look at what he was told at the time. Is it correct that the marker is the account? Check he has been treated fairly. If not, complain and ask for it to be removed
2. as others have said, broker should be able to find the best deal for you

Why didn’t you pay it rather than him taking a payment break. This is what happens when married couples live like they are single. The best thing you can take from this is to share finances. That will prevent future issues.