I am buying a home and had a formal mortgage offer in place from Barclays. I am expecting to exchange and complete on the property in a few weeks’ time.
However as mortgage rates came down my broker submitted an application to switch the loan offer to a cheaper deal.
Barclays ran a credit check that identified recent red marks from BT. It said that this meant it could no longer proceed with the application for a new rate, or the original offer, and I have been left in limbo.
When I moved out of my previous property the BT account wasn’t closed properly and it sent me a bill seven months after I vacated the house. However, as I was no longer living at the property I was unaware there was an issue.
When I contacted BT’s customer services team it said it was looking to correct my credit file, but this can take up to six weeks to resolve.
Having a mark on your credit report will limit your access to borrowing and may impact a process such as a mortgage application
However, I am supposed to exchange by the end of the month and there is no chance I will be able to make a new application to a different lender in time.
I made my initial mortgage application in October 2022 and at that point my credit file didn’t show any adverse marks.
I am a single mum with four children and currently in a position where I am going to lose everything.
I don’t understand how I could be in this position over an incorrectly sent bill for £40. Please help.
Fran Ivens from This is Money replies: The past six months have been a volatile time for mortgage rates. Since the fallout from the mini-Budget in September when rates shot up to record highs borrowers and brokers have kept a keen eye on the market not wanting to miss any fall in costs.
And though they have fluctuated, flirting with rates close to 3.5 per cent, fixed rates now seem to have stabilised around 4 per cent.
If you first applied to Barclays in October, it makes sense that you would want to move your loan onto another rate before finalising to take advantage of the steady decrease in prices we have seen since the start of the year.
In October average fixed rates peaked at 6.65 for a five-year fix and 6.52 for a two-year fix, according to Moneyfacts. They are now down to 5.35 per cent and 5.04 per cent, respectively.
Most lenders will allow borrowers to switch to a new rate before the mortgage application completes with only an additional credit check, rather than having to complete another full application.
However, this is where you ran into issues. The open BT account left you with an unpaid bill and therefore a mark against your credit score. And as you had vacated the property, you were unaware of the problem and could not correct it before it was too late.
At this point I must add that the BT representative I spoke to said it had removed the mark as a gesture of goodwill, but not admitted any error with regards to the open account.
It says money was owed due to a missing ‘smart-hub’ internet router that had not been returned and it tried to contact you multiple times about the issue.
The good news is that BT is working to correct your credit file. But as you say, this can be a lengthy process and you do not have the time to spare before you need to complete your house purchase and exchange on the property.
You have tried to speak with Barclays, but have been told the case is closed you will need to reapply to secure another loan.
And while your mortgage broker sent over evidence from BT that it is fixing the file, he hasn’t heard back from them.
I got in touch with Barclays on your behalf and asked if they could take another look at your case in light of the circumstances.
I’m happy to say they have reviewed the situation and are now proceeding with a mortgage offer for you on the lower rate in time for you to exchange on the new house for you and you children.
A Barclays spokesperson said: ‘Following a product change request to a lower interest rate it was necessary to review the customer’s credit record.
‘Information that would not have been previously seen on the credit file prompted a further review of the application. We’re pleased to confirm that upon confirmation the adverse information has been resolved, we are able to proceed with the mortgage offer.’
The lender said it encourages customers who may be considering a large financial commitment to review their credit files to ensure that they are accurate. Any inconsistences or errors should be identified and discussed with the relevant parties.
Fran Ivens adds: This is a great outcome, and I am sorry for the stress you have had to go through waiting for a resolution.
I hope you have a successful move you and your children are very happy in your new home.
