Getting a Mortgage with Missed Payments

Obtaining a mortgage with missed payments is likely to be more difficult than for applicants who have a clean history. What the missed payments relate to and the times when they occurred will also likely have an impact.

Typically, the more historic a missed payment is, the better your chances. However, the more severe a missed payment is, the more weight it can carry. For example, if your credit history is purely an occasional missed payment you’re likely to find it easier to obtain a mortgage, whereas if you have a registered default or CCJ then the chances of success are decreased.

These factors will determine what size deposit or amount of equity you may require and the interest rate available.

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Author: Carl Shave - CEO and co-founder
Last updated: 10 Apr 2024

Can I get a mortgage with missed payments?

For many, the usual response to this question is yes. As with any bad credit on your file, your individual circumstances need to be considered, for credit factors such as:

  • How many missed payments are there?
  • When did they occur?
  • What do they relate to?
  • Are they missed payments or classed as late payments?
  • Are they in addition to any other adverse credit events?

Other elements of the borrower’s circumstances will also play a part:

  • Size of deposit or amount of equity
  • Current debt to income ratio
  • Present financial conduct
  • Loan to income ratio

An introduction to Bad Credit Mortgages

Bad Credit Topics

Whether it be late payments, defaults or CCJs, we’re here to help you secure a mortgage.

Useful Information

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 adviser 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.

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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:

LTV

Missed in the last 3 months Missed in the last 6 months Missed in the last 12 months Missed in the last 24 months Missed in the last 36 months Missed over 36 months
Up to 95% None Maximum status 2 Maximum status 2 Maximum status 2 Any Any
Up to 90% None Maximum status 2 Maximum status 2 Maximum status 2 Any Any
85% or below Any Any Any Any Any

Any

 

Secured

LTV

Missed in the last 3 months Missed in the last 6 months Missed in the last 12 months Missed in the last 24 months Missed in the last 36 months Missed over 36 months

Up to 95%

None Maximum status 1 Maximum status 1 Maximum status 2 Any Any

Up to 90%

None Maximum status 1 Maximum status 1 Maximum status 2 Any

Any

Up to 85%

Maximum status 1 Maximum status 1 Maximum status 1 Any Any

Any

75% or below

Any

Any Any Any Any Any

 

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.

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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.

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Who are the best mortgage lenders if I have missed payments?

When you have a blemished credit file you’ll want to ensure you’re getting the best mortgage for your needs. With every lender applying their own individual way of assessing, there’s no list of ‘best lenders’ that can be given.

The more severe your missed payment history, the lesser the choice of lenders available to you. However, with the right research, you can still find a competitive mortgage deal.

Using an experienced mortgage broker who specialises in this sector can massively improve your chances of success. They’ll be able to use their knowledge of the market to ensure you get a suitable deal. They can also give you a plan of action for your future requirements.

Lenders consider many factors when looking at your application. such as:

  • What type?: The type of borrowing or credit facility the missed payments relate to. Missed payments on a mortgage are likely to be viewed as more severe than on a credit card.
  • Deposit/equity: The amount of deposit or equity you have available will determine the security risk. The lower the loan to value (LTV), the better.
  • Income and affordability: How much you’re borrowing in relation to your income. The less you borrow in relation to your income, the better the chance that it will be viewed as affordable.
  • Other credit issues: Do you have any other credit issues in addition to the missed payments?
  • Number of missed payments: One missed payment is likely to be seen as an oversight, whereas many or frequent missed payments will indicate that you’ve struggled to meet your obligations.
  • When they occurred: Recent missed payments indicate to a lender that you’re possibly still experiencing financial difficulties, whereas if they’re more historic, this will likely show that you’re now back on your feet.

Are some missed payments worse than others for a mortgage application?

Yes, certain missed payments will carry a lot more weight than others. The list below highlights the different severities of missed payments.

The following list shows which missed payments are deemed severe/important, from the least impact to the worst:

  1. Mobile phone contract
  2. Utilities i.e.  gas, electricity
  3. Bank overdrafts
  4. Credit cards or catalogue accounts
  5. Unsecured loans or finance agreements
  6. Secured loans or second charge lending
  7. Mortgages

 

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Frequently asked questions

Like any bad credit issue, missed payments will stay on your credit file for 6 years.

Firstly, the type of missed payment will be the most important factor. Typically, missed mortgage payments have the most influence. Any late or missed mortgage payments are viewed very seriously by a lender.

This is because when money is tight, the mortgage is generally the last payment to be missed. For most people it is the most important payment they have, so a missed credit card or phone bill will carry less weight.

Another factor that’s very important is the amount of time that’s passed since the missed payment. The more recent it was, the more impact it will have.

There’s no set amount of missed payments that lenders won’t accept. Remember that the type and the elapsed time since the missed payment will influence a lender’s decision.

The amount of missed payments before a repossession order is issued will depend on your lender.

The typical maximum amount of payments that can be missed is six, although it can vary.

Why choose Just Mortgage Brokers for your Bad Credit Mortgage?

  • This is our speciality – it’s what we do
  • Direct access to lenders underwriters enabling us to discuss your situation in detail
  • Exclusive deals available
  • Broker only bad credit lenders available to us giving you greater choice
  • Unlimited mortgage broker – giving a wide range of lenders at our disposal
  • Great customer reviews

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