My mortgage was rejected – over a £36 unpaid phone bill

S.M. writes: I sold my buy-to-let property, which had a Santander mortgage with three years left to run on a five-year fixed rate. This incurred a £10,000 fee, but when I applied for another mortgage within the permitted three-month break period, I was turned down. The reason was a bad debt connected to my property, which I bought from my late father’s estate.

WHEN you were told about the bad debt, you realised that this was actually just £36 which was owed to Virgin. Your father died before paying his phone bill, you bought the property and the £36 debt appeared under your name. This was enough to mean an automatic refusal by Santander to transfer your buy-tolet loan to a fresh property, even though you paid Virgin.

I asked Santander to look into this, and a few days later the bank told me: ‘We have reviewed Mr M’s case as part of our routine appeals process and have approved the mortgage application, subject to a valuation.’

As a gesture of goodwill, Santander is also refunding its valuation fee.