Marital Split and Credit Issues Case Study

by | Wednesday 12th Jan 2022 | Mortgage Case Studies

Client has credit issues

Key features:

Client was splitting up with his partner and wanted to do a buy to let remortgage on their shared property to release equity and buy his ex-partner out. Fairly straight forward remortgages plans were thrown in to disarray when an unexpected credit issues appeared on the clients file.

Credit check would not pass with lender meaning that he could not get a mortgage to buy out his ex.

Our client:

Our client has separated from his partner, and they jointly owned a home together. Wanting to part ways as smoothly as possible, our client wanted to remortgage the property as a buy to let and release some equity from the remortgage to buy out his ex’s share. Meaning that he would be the sole owner of the property. A relatively straight forward process as lenders will often grant buy to let mortgage based on income and potential rental yield which would not be a problem for the area. However, this not uncommon scenario soon became rather difficult as our client learned that he has an unsatisfied default payment on his credit file that he had no idea about.

Several years before a payment for our client’s phone bill did not go through correctly and registered as a missed payment. The phone company had tried to make the client aware but had sent notification letters to an old address which the client never received. As the payment was not made, the phone company registered a default against him. With an active default on his file, he failed credit scoring with several lenders and was stuck very much between a rock and a hard place.

How did we help?

They approached us for our advice on how to best move forward with his plan with the current predicament he was in. Our advisor Oliver spoke to the client in depth to gain a clear understanding of what the situation was, where the credit issues lay and what we could do to help. Oliver identified and recommended that addressing the defaulted payment was our client’s main priority. So, we facilitated a process which allowed our client to speak to a solicitor and the credit agency who recorded his default to appeal it and eventually have it wiped from his credit file completely.

We were there every step of the way to support him in this and give our guidance wherever we could. This did take a few months to completely clear however once it did, our clients credit score actually increased, and we managed to secure him a credit check and subsequently we remortgaged the property on to a buy to let mortgage with a high street bank and also released enough equity to buy out his ex’s share of the property.

What was the rate?

We initially managed to secure our client with a mortgage offer that was fixed for 2 years on a rate of 1.46% however, during the process we identified an even lower rate at 1.20% again secured for 2 years so we easily swapped the product to the new rate saving our client thousands of pounds over the two years.

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