Mortgage Application question

DulchieLaois

I have a question that needs help

I am putting together the information for my mortgage application form

One of the questions is loans outstanding.

Previously, I had a loan with the same bank which I was unable to make repayments on, a couple of years ago when i hit financial trouble.

They sold the debt onto a debt collecting agency to whom i make a monthly payment to every month and all is in good order now and I am making repayments every month.

This was a mark on my credit bureau check but was taken off earlier this month as its over 5 years old now.

Should I mention this on my mortgage application form ?, I am skeptical that the bank will use this against me, if they were to reject my application.

Otherwise, my record is very good.

Thanks

1234fakest

Thats a tough one;

Its bad marks are clear from your ICB but the following might cause an issue;

-your bank statements will show monthly repayments to a debt collector.

-Even if they miss that they will see the debt outstanding on your ICB and want to know what it is

Can you not clear the remaining debt from your savings and wait a few months (while building the savings back up)?

vitani

From my experience of working in a bank some time ago, even if it's with a debt collector, the loan is still outstanding with the bank. The bank have outsourced the collection, and the agency will charge a percentage of whatever they take in, but the bank won't have closed off the loan and your payments are still going to them. Either way, they'd still be able to look up your history and see the fact that the loan had to be given to a debt collector.

Coillean

Request from your bank in writing a copy of all personal data that they hold on you, you'll have to pay a fee of around €6. Contained in that will be all the info the bank can access in relation to a previous loan you had taken out with them. If your loan details are in there they could potentially ask you about it in new mortgage application. Therefore you'd be as well to disclose it.

Banks nowadays take account of the effect that the recession has had on peoples incomes when you are applying for a new mortgage. If financial difficulties experienced as a result of loss of income have arisen in the past then a frank discussion about how these took place and a reasonable projection of a mortgage applicants future employment/income prospects should be enough to get over the issue. Future prospects obviously need to be good.

Can you pay off the existing loan with savings funds? Do so and it will inevitably increase the amount if a mortgage that you could potentially qualify for

Bateman

It's a no-brainer as it's an ongoing current debt/liability so you disclose it, simple as