I’ve had mortgage arrears will someone lend to me to buy a house with Missed mortgage payments and how much deposit do I need to pit down.
Let’s not pretend a history of mortgage arrears is the last thing any Mortgage Lender wants to hear. It’s the one bill above all others that they take comfort in if they are to lend. In fact I’d go as far to say even missed payments of status 1’ or ‘2’ on a credit file would put most high street Lenders off. However not all Mortgage Lenders are the same and Niche Advice specialists in complex situations including mortgage arrears.
In this article we concentrate on purchasing a property to live in after getting mortgage arrears. Remortgaging is possible but probably only advisable if you want to release more money.
So how missed is missed? Well the table below gives you a flavour of where we can help. This should be read in conjunction with a credit report from experts such a Equifax, Experian or Noodle. We have a link to Equifax on this site if it helps.
Your acceptance will of course be subject to the usual mortgage checks on affordability, residency, deposit etc.
Guide to Maximum Mortgage Arrears 2017 when trying to get a new mortgage
| Worst Missed Payment Level* | When they occurred | Minimum deposit |
| Status ‘1’ | Over 9 months ago | 15% |
| Status ‘2’ | Over 9 months ago | 20% |
| Status ‘2’ | Over 6 months ago | 25% |
| Status ‘3’ | Over 6 months ago | 30% |
| Status ‘6’ | Over 12 months ago | 25% |
| Repossession** | Over 13 months ago | 25% |
* Based on levels in the last 3 years. More tolerance may apply on older scenarios.
** There must be a life changing event that happened to cause the repossession i.e. job loss, divorce / separation, business failure, illness to you or close family member, and your circumstances must have improved. The repossession must not have included a debt shortfall or repayment plan
You should always consider approaching your current Mortgage Lender to see if they can help with a new mortgage after mortgage arrears, and also speak to a renowned specialist Mortgage Broker such as Niche Advice.
Example Product Rate and Fees – Mortgage Arrears (Residential)
[ezcol_1fifth]Initial Rate: 5.34%[/ezcol_1fifth] [ezcol_1fifth]Subsequent: 5.99%[/ezcol_1fifth] [ezcol_3fifth_end]The overall cost for comparison 6.15% APRC[/ezcol_3fifth_end]
The total amount you must pay back, including the amount borrowed is £437,466.02
Features: 2 missed mortgage payments, none in the last 9 months.
| Type and initial benefit period | Fixed for 2 years |
| Minimum deposit / equity: | 20% |
| Valuation fee | £520 |
| Booking fee | £0 |
| Lender arrangement | £1495 |
| Telegraphic transfer / CHAPS fee | £0 |
| Legal fee | £126 |
| Early repayment charge | 3/2% of the amount repaid in the fixed period |
Any property used as security, which may include your home. may be repossessed if you do not keep up repayments on your mortgage
Important Information
Residential and Buy to Let Mortgages
Rates current as at 07/01/2017 . The overall cost for comparison is based on a purchase price of £300,000 over a 25 year term. The Right-to-Buy example is based on a discounted purchase price of £150,000. Repayment for Residential and Interest only for Buy-to-let (unless otherwise specified). Eligibilty will depend on your own personal circumstances.
KEY – ERC = Main early repayment charge.
The purpose of this web is for information only and is based on a fictitious illustrative scenario. It does not constitute a Mortgage Offer in any way.
It is essential that you seek independent mortgage advice as a suitable product will be based on your own individual circumstances. An interest rate should not be read in isolation, and you should refer to your personal key facts illustration and Mortgage Offers for full terms and conditions. If anything is unclear it should be discussed fully with both your mortgage and legal advisors before entering into a mortgage contract with the lender.
The information contained herein is based on research through the Trigold (IRESS UK) sourcing system. When first published to this site the data is normally 24 hours behind real time, and may or may not still be available.
A first charge over your property is required as security for the loan.
The formal mortgage offer of an advance will be subject to a valuation and other satisfactory references.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.
