Can I get a mortgage - I have a missed payment?
Updated: Jan 19
Getting a mortgage is very much about convincing the lenders that you are a good bet that you will not default on the payments. It is for this reason that the lenders pay great attention to your past record when it comes to your past credit commitments. Having a good credit history is therefore important. All however is not lost if you have a poor credit history - time is a great healer when it comes to repairing past aberrations.
Getting you started
Let's start by talking about how to get a credit report. You can pay for an online subscription with the likes of Experian, Check My File, or Equifax. You can join online forums that will give you access to Experien for free or you can use one of the plethora of credit sites that pop up to give you a free report. As with all things paid, you will get better information than that of the free service. Using the credit agencies that are free are fine for getting a mortgage. The big takeaway is that once you have downloaded whatever app you are going to use - for goodness sake keep logging in. Once you understand your credit profile you need to create a relationship with it. Bad credit history is going to land you in serious trouble so you need to look after it!
The good news is that one missed payment is not going to sink your application. If however you have two and they are consecutive then this is starting to get problematic. You will see on your credit report if you have missed payments that there is a number next to the missed payment. If you have any that have a 3 next to them then this is not great and it will prove more difficult to get a mortgage. If you are merely late then this is not a big problem. I would suggest that if you are going to pay the debt but it is going to be late then contact the company that you have the credit with and explain the circumstances. See if they will just put this down as a late payment rather than a missed payment. This might be the most important telephone call you make!
Some lenders do not make any comment on missed payments and will rely upon what they term "down to credit score" which will be an internal scoring system that will take all sorts of information into account and then spit out a "yeah" or "nae". In my experience, there is little that you can do as far as appealing this kind of thing if it comes back in the negative.
Lenders want to back the right horse. What you will tend to find is that those with the softer criteria who are prepared to overlook your past indiscretions are likely going to be charging you more in interest if they are prepared to give you a mortgage. If your credit report is as clean as a whistle then you will have access to all the lenders and stands to reason all the best rates.
The information above is related to unsecured credit ie PCP deals, car loans, bank loans, or credit card debt. Missing a mortgage payment, however, is an entirely different kettle of fish! We'll cover that off in another article.
If you have got to the stage where you have not made payments for several months then the lenders may decide that enough is enough and default the credit agreement. This is not good. We will do a blog on this in the coming weeks.
Hopefully, you will see that there are solutions for you. The most important thing is to seek advice about your own specific circumstances. Every case stands on its own merits and your position may have lots of positives that will outweigh the credit issues. When taking advice make sure that you speak to a broker that has access to the whole of the market. You need someone who can speak to all of the lenders, not just a panel. You may need all the help that you can get on this one!