Getting a Mortgage with Missed Payments

How do I get a mortgage with missed payments?

Getting a mortgage with missed payments can feel like an uphill struggle at times. This is because many lenders shy away from individuals with a bad credit history.

However, all lenders differ in the way they make their assessment of potential borrowers. This means it’s still possible to obtain funds for a mortgage.

We would suggest you avoid applying for lots of different products in the hope that you’ll be accepted for one. Doing this can actually damage your chances even more.

The best course of action is to speak to a specialist mortgage advisor who deals with this type of lending. Their knowledge and expertise will enable them to assess your situation and determine the best path to take.

How old do missed payments need to be before I can apply for a mortgage?

The simplest way to answer this question is to say the more historic it is, the better. Although this is likely true in most circumstances, it’s not necessarily that straightforward.

Your chances of obtaining a mortgage will be determined by the type of missed payment and the deposit you have. Secured loan or mortgage payments are seen as the most important level of lending, so lenders typically require missed payments to be very historic before offering you a mortgage product. Furthermore, the larger your deposit in relation to the loan amount, the better your chances of being offered a product.

Our tables below show how the time passed since a missed payment can affect you:

Secured

None – Indicates no missed or late payments per credit agreement

Any – Permits any number of missed or late payments per credit agreement

Maximum Status 1 – This represents one missed or late payment per credit agreement

Maximum Status 2 – This represents 2 missed payments per credit agreement indicating arrears. The status recorded will increase consecutively with each missed payment.

What are the best mortgage rates if I have missed payments?

When arranging a mortgage, one of the highest priorities for people is the rate or product they are getting. If you have a range of choice for lenders, you’ll be able to choose the right option to suit your needs.

However, on occasion your choices may be reduced for a multitude of reasons. This could be due to factors such as affordability, amount of deposit or equity, and for some your credit rating. You may be forced to choose a deal with a slightly higher interest rate if these factors affect you. Furthermore, you may be required to provide a larger deposit or greater amount of equity.

If you have bad credit and you want to improve your chances of getting a better deal, we recommend looking to improve your record. Our complete guide can help you do so.