Mortgage with Late Payments

The short answer is that yes, they can. Lenders use the information on your credit report to assess whether you appear to be able to manage your money, and a history of late payments is a red flag that suggests you might not pay your mortgage on time, either. That makes you a bigger risk, so even if the lender is still prepared to make an offer, they might request a bigger deposit or charge a higher rate of interest.

Even if you feel a late payment wasn’t your fault – say, for example, you paid your credit card bill late because you didn’t receive your usual statement – it will still have an adverse effect. Lenders take the view that it is your responsibility to pay your bills; you know you have that payment to make every month and if you don’t get your statement you should contact the lender or check your account online; not receiving the paperwork is not a free pass to avoid paying on time.

Late payments will stay on your credit record for six years, so will potentially impact your chances of approval or the type of deal you might be offered for that length of time. Generally speaking, the longer ago the late payments happened, the less chance there is they will have a serious impact.

Late and missed payments stay on a person’s credit record for six years. When it comes to making a fresh credit application the older they are, the better.

If the case of more recent late or missed payments – say within the last couple of years – it’s not that you won’t be considered, necessarily, it’s more that you will have fewer options. The loan-to-value ratio offered is likely to be lower and the interest rate and fees higher. Provided your mortgage payments are currently up to date then your overall credit rating will likely be the deciding factor.

Typically no, this will be classed as a late payment, as it was made after the due date had passed. If it is noted on your credit report, it will usually have the number ‘1’ next to it, indicating that the payment was made in the month after it was due.  This could still apply even if you made the payment in the same calendar month that is was due.

The good news is that if you pay a bill a few days late it might not even show up on your credit report. To know for sure, request copies of your report from the UK’s three main credit reference agencies, Experian, Equifax and Callcredit.

The odds are stacked against you in these circumstances. If you are in an arrangement, then you are probably paying less each month than the mortgage was initially arranged for. This is likely to have an ongoing adverse impact on your credit rating. Also, if you can’t afford your existing mortgage, you’ll have difficulty proving you can afford another one.

Your best bet would be to get back on track with your current mortgage and also take steps to repair your credit rating.

Having said that, everyone’s circumstances are different and there are specialist lenders who evaluate each case on its own merits. At Just Mortgage Brokers, we have an experienced bad credit team that can help; get in touch today for free initial advice and no-obligation quotes.

Potentially late payments could affect a credit score, but how much they affect a score can depend on the amount and timescales of the late payments. If possible, look to bring any late payments up to date as soon as possible as this should help improve a credit score.

How long late payments can affect your credit score can depend on many factors including the timescales and the number of late payments that have been registered. A credit score is nevertheless determined in varying ways by different companies, so it may affect one provider’s credit score more than another, resulting in differences in their ability to approve a possible mortgage or loan.