Mortgage After Late Payments
How To Get a Mortgage After Late Payments
Mortgage After Late Payments
Worried about getting a mortgage with late payments on your credit report?
Many lenders may decline applicants due to recent late payments or a low credit score (which late payments can cause). But the good news is that getting a mortgage with late payments is possible, as there are specialist lenders happy to consider borrowers with late payments on their credit history. With access to the whole UK market, our dedicated team here at Amber Mortgage Solutions can help you to find them.
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What Is The Difference Between Missed And Late Payments?
A missed payment is when you fail to pay one or more scheduled payments entirely, whereas a late payment is a payment made after the due date has passed.
A record of a late payment will show on your credit report with a ‘1’ next to it, showing that the payment arrived one month late. As more payments are missed, this number will increase to show the number of months that a payment has been left outstanding. However, once the payment has been made this number will freeze.
Whilst a payment that is paid a couple of days or even weeks late may not be recorded on your credit report, it is not worth risking late payments. So if you’re serious about securing a mortgage with late payment history, take care to always make your payments on time and remember to allow at least three working days for payments to be received and processed.
What Are My Chances Of Mortgage Approval With Late Payments?
There is no doubt that late payments on your credit file can affect your mortgage application. When assessing your application, lenders will look at your credit file to determine whether or not you’re capable of managing your money and are a credit worthy applicant. Late payments are red flags to lenders and suggest that you’ll be unable to make your mortgage repayments on time. Even if a lender does decide to accept your application, you may still come up against higher rates of interest and be required to put down a bigger deposit.
Lenders have the outlook that your finances are your responsibility. So, even if you believe that a late payment wasn’t your fault – for example, you paid a bill late because you didn’t receive your statement on time – it is up to you to regularly check your account and contact creditors to correct any mistakes.
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How Long Should I Wait To Apply For a New Mortgage After Late Payments?
Late payments will remain on your credit report for six years. This means that for those six years your chances of securing a competitive mortgage deal are potentially going to be affected.
Typically, the older your late payments, the less of an impact they’ll come to have on your mortgage application. For example, if you were to have one or two missed payments in the last six years, whilst this wouldn’t necessarily mean that your application will be declined, it might mean that your offer will come with a request for a higher deposit or with a higher rate of interest.
Multiple missed payments or new missed payments in the past twelve months are likely to have a far bigger impact on your application.
It is important to remember that whilst late payments can affect your chances of mortgage approval, you do not have to wait until late payments are gone from your record before you can apply for a mortgage. Our experienced bad credit advisors have access to specialist lenders who will be happy to look at your application and find you deals to suit your individual circumstances.
What Happens When You Miss a Payment?
The first thing that happens when you miss a payment, is the lender will let the credit reference agencies know. The amount of time between when the payment is missed and when the account is brought up to date is then registered by these agencies, leaving the number of months that the amount was unpaid visible on your credit report. It is this record that will then go on to have an impact on any of your future mortgage applications.
If you miss a payment on a loan, such as a mortgage or a car, then these may be repossessed. Or, if you miss a payment on a credit card, then your card will be frozen until you’re back up to date with your payments.
Missed Or Late Mortgage Payments
Late or missed mortgage payments are considered to be very serious and some lenders may see these as an indication of severe financial trouble.
If you have fallen behind with mortgage payments in the past but are now up-to-date, then your overall credit rating since is going to be important to whether or not your application is accepted. However if you’re currently still behind on your mortgage payments, then it is highly unlikely that you’ll be approved for any remortgage deal.
Whatever your current situation may be, you can speak with one of our specialist advisors today for expert and friendly advice on the best options available to you.
What Can I Do To Repair Credit Late Mortgage Payments?
Want to improve your chances of being approved for a mortgage?
There are several things you can do to start repairing your bad credit history and gain the approval you need for a mortgage.
The first step is to check your credit report. Copies of this report can be obtained for free, from a wide range of trusted online providers. Next, you will need to check that all information on your report is correct. If you find any mistakes or any records of bad credit that shouldn’t be there, for example, a missed payment that you were unaware of, then you will need to get in contact with the agency and have this amended.
If there are any records of late payments on your file that you feel were a result of circumstances outside of your control – bereavement, sudden illness or unexpectedly losing your job – then it is worth contacting the agencies concerned to see if they will add a note of correction to your file.
The next step is to rebuild your credit history. Going forward, try to demonstrate that you are able to pay your financial commitments on time. Avoid mortgage late payment charges and bad credit incidents of any kind. Another thing you can do is start saving for a good sized deposit. With missed or late payments on your credit report, it’s more likely that lenders will offer you a smaller loan-to-value (LTV) ratio. The LTV is the amount of the purchase price of a property that a lending is willing to offer you. So, the larger the deposit you’re able to put down, the better the deal lenders will be able to offer you.
Seek Specialist Mortgage After Late Payments Advice
Have high street lenders turned you down when applying for a mortgage with late payments on your credit report? Then speak with one of our specialist mortgage brokers today.
Our knowledge and experience of bad credit mortgages means that we’re able to source the best deals for you, regardless of where you are on your property ownership journey. We have access to the whole market, giving us admission to exclusive rates not available on the high street.