Securing a Mortgage with missed Payments on loans, credit cards Utility bills and even mortgages
In this practical guide, I discuss how we can help, and you can help improve your chances of getting a mortgage with missed payments.
To put this into context, the “missed” payments are in relation to personal credit commitments such as credit cards, store cards, personal loans, payday loans, hire purchase, phone contracts, gas bills, water bills, and electricity bills. I do NOT cover mortgage arrears in this piece.
How can we help?
- We have over 80 Mortgage lenders on our panel.
Many of these are NOT open to the general public and can provide more tolerance to missed payments, including those that do NOT run a computerised credit scoring system.
To give you a general idea, the cut-off point for standard high-street Mortgage Lender brands is typically Status ‘2’ on multiple commitments in the last 12 to 24 months and perhaps Status ‘3’ if the issue is isolated. - Appreciation of how missed payments are viewed
Rather than jump at a Specialist Lender our 15 years’ experience allows us select appropriate cheaper high street Mortgage Lenders brands. For instance we know certain lenders might NOT mind problems that are over two to three years old. - Interpretation of missed payments to your advantage
Sometimes, Mortgage Lenders are vague with the details on their policy, possibly to avoid too many missed payment cases. For instance, they might publicise in their marketing no more than 2 missed payments in the last 12 months, however this could be two missed on every commitment rather than simply with one credit provider. It could also mean Status ‘2’, yet it’s been a Status ‘2’ for a number of months, and there are Mortgage Lenders that would not see this as missed as there is no change in the recording. - In the know
We knew that certain Mortgage Lenders do NOT apply their missed payment rules to specific categories, such as mobile phones, internet, and landline bills, or when the missed payments total less than a monetary limit, say £300.
Thinking outside the box
Can we make the case work in a sole rather than a joint name, leaving the person off with the worst missed payments? We have a system tool that references over 45 lenders’ affordability assessments. Is the level of deposit holding you back? Could you get a “gift” from a family member to help? - Guide you towards the right Mortgage Lender Choice
If there is ambiguity over your mortgage acceptance, we can help guide you towards Mortgage Lenders that run a “soft” credit check at the initial decision-in-principle stage, so it will NOT harm your public credit rating.
How you can help yourself
- Settle your missed payments.
When looking at missed payments, it’s important to remember that “live” or “current” outstanding missed payments on your credit record will almost certainly need to be brought back up to date / cleared before the mortgage application for you to be successful. If it’s reached the “default” stage (i.e. over six months arrears), then the Mainstream Lenders will normally want these to be satisfied within a certain timeframe before mortgage application. - Stay on top of your finances and challenge incorrect entries in a timely manner.
The best place to begin is with a clear picture of where you stand, and for this, I would recommend a multi-agency credit report such as Checkmyfile https://www.checkmyfile.partners/3W8F36M/2CTPL/ as Mortgage Lenders will use different credit feeds. - If you spot a missed payment, mainly if you’ve made good within the same month yet it’s showing as missed – challenge the registration, I’ve seen numerous clients have successful reversals of wrongly recorded data. Here are some helpful numbers: Equifax T: 0800 014 2955; Experian T: 0800 013 8888; TransUnion T: 0113 388 4300; and Crediva T: 029 2005 4271.
Also, by regularly checking your credit report, you are on top of potential fraudsters! - Make sure your Mortgage Broker is checking the detail
For instance, there are a number of Mortgage Lenders that ignore mobile phone bills – but only a few when the entry is recorded as a “loan” rather than “communications”. - Responsibly entering an “Arrangements to pay”.
If you know that you are going to be struggling with a particular bill, then be proactive. Call the provider ahead of them, recording this as a missed payment rather than an agreed reduced payment. Also make sure this is correctly recorded on your credit record “AR” marker on your Checkmyfiles for Equifax and TransUnion (please note this does not reflect in the same way on Experian). To expand: Mortgage lenders are more receptive to “ARs” if the record started that way rather than Status ‘1’ to ‘2’ into ‘AR’ as you have been shown to be accountable for the situation.
Improve your credit score.
There are many practical tips; here are some examples below:
– Consider taking out a credit card with its repayment set to clear monthly by direct debit and use it for your shopping.
– Get yourself registered on the Voters Roll.
– Make sure your name is shown the same way on all bills and matches your photo ID.
– Remove any historic financial links to ex-partners.
– Spread your credit card balances across multiple cards rather than “max out” the limit on one.
– Space out taking finance – multiple applications in quick succession is likely to have an impact.
The above information portrays a generalised overall scope with regard to getting a mortgage with late payments on personal credit commitments. Every case is treated individually and will depend on the Mortgage Lender. There may be “exceptions” to the rules stated. It is, therefore, vital that you research your position thoroughly and seek professional advice from a suitably qualified Mortgage Broker, such as Niche Advice.
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