Having missed mortgage payments in your credit history can feel like a major roadblock when applying for a new mortgage. While it’s true that missed payments are a red flag for many lenders, they do not necessarily disqualify you from securing a mortgage. With the right approach, careful preparation, and the help of specialist lenders, it is entirely possible to obtain a mortgage even with past financial hiccups.
Is It Possible to Get a Mortgage with Missed Mortgage Payments?
Yes, you can still secure a mortgage even with missed mortgage payments in your credit history. Lenders treat missed payments as serious, but many are willing to assess your application on a case-by-case basis. Specialist lenders are often more flexible than traditional high street banks and can provide solutions tailored to your situation.
Key Factors Lenders Consider
How Long Ago the Missed Payment Occurred: Payments missed over 12 months ago carry less weight in the lender’s decision-making process.
Frequency of Missed Payments: A single missed payment is more forgivable than multiple or consecutive missed payments.
Reason for Missed Payments: Lenders are more understanding if the missed payments were due to exceptional life events, such as redundancy or illness.
Current Payment Status: Being up-to-date with your mortgage payments can improve how lenders view your application, demonstrating financial recovery and stability.
Steps to Secure a Mortgage with Missed Mortgage Payments
Step 1 – Check Your Credit Report
Begin by reviewing your credit report using tools like Check My File or other credit reporting services. This will help you understand how the missed payment is recorded and give you insight into your overall credit profile.
Key Actions:
- Identify the date and frequency of missed payments.
- Ensure your credit file reflects that you’re now up-to-date with payments.
- Dispute any inaccuracies that could negatively impact your score.
Step 2 – Work with a Specialist Mortgage Broker
Missed mortgage payments often require a strategic approach to mortgage applications. A specialist mortgage broker can significantly improve your chances of securing a deal.
Benefits of a Specialist Broker:
- Identifies lenders who are more accommodating to applicants with missed payments.
- Focuses on lenders prioritising future affordability over past issues.
- Tailors your application to maximise approval chances.
Step 3 – Save for a Larger Deposit
A larger deposit reassures lenders and reduces their perceived risk, particularly if you have missed mortgage payments in your history. While a 5–10% deposit may suffice for those with strong credit, a 15–20% deposit is often recommended in these circumstances.
Advantages of a Larger Deposit:
- Increases the range of lenders willing to work with you.
- May lead to more favourable interest rates despite a blemished credit history.
Step 4 – Provide an Explanation for the Missed Payments
Lenders appreciate honesty and transparency. Explaining the reasons behind your missed payments can make a significant difference, especially if the issues were temporary and your financial situation has since improved.
What to Include:
- Documentation of the circumstances, such as redundancy notices or medical records.
- Evidence of how you resolved the situation, such as proof of increased income or reduced expenses.
Step 5 – Demonstrate Financial Stability
Lenders need assurance that you’ve regained control of your finances. Demonstrating stability through consistent financial habits is key.
How to Show Stability:
- Provide evidence of on-time payments for other financial commitments.
- Share bank statements reflecting steady income and controlled spending.
- Highlight any savings or emergency funds that showcase financial preparedness.
Case Studies
1: Single Missed Mortgage Payment
Profile: Emma missed one mortgage payment eight months ago due to unexpected medical expenses.
Solution: By working with a specialist broker, Emma secured a £250,000 mortgage with a 15% deposit through a lender that focused on her improved financial situation.
Outcome: Emma successfully purchased her new home.
2: Multiple Missed Payments Due to Redundancy
Profile: John missed two consecutive mortgage payments 18 months ago after being made redundant.
Solution: With stable employment and a 20% deposit, John worked with a broker to find a lender willing to accommodate his circumstances.
Outcome: John secured a £300,000 mortgage, demonstrating financial recovery and stability.
Common Challenges and Solutions
1: Recent Missed Payments
Problem: Payments missed within the last 6–12 months are considered higher risk.
Solution: Focus on showing financial improvement, such as consistent on-time payments, increased savings, and stabilised income.
2: Multiple Missed Payments
Problem: Consecutive missed payments may suggest ongoing financial difficulties.
Solution: Work with a specialist broker to find flexible lenders and provide evidence of recovery, such as a stable income and reduced debt.
3: Limited Lender Options
Problem: High street lenders often decline applications with missed payments in the credit history.
Solution: Specialist brokers have access to niche lenders willing to accommodate your circumstances.
Key Benefits of Working with a Specialist Broker
- Access to Niche Lenders: Brokers know which lenders are open to applicants with missed mortgage payments.
- Tailored Advice: They can help strengthen your application and maximise your chances of approval.
- Time-Saving: Brokers streamline the process and target lenders most likely to approve your application.
Conclusion
Securing a mortgage with missed mortgage payments is challenging but far from impossible. By understanding the factors lenders consider, working with a specialist broker, and taking proactive steps to improve your financial profile, you can increase your chances of approval. Whether it’s through providing a larger deposit, offering a clear explanation of past difficulties, or demonstrating financial stability, there are clear pathways to achieving your mortgage goals.
Missed mortgage payments may complicate the process, but they don’t have to derail your plans for homeownership. With preparation, guidance, and the right lender, you can turn the page on your financial history and secure the mortgage you need.
Frequently Asked Questions
Q 1: How long do I need to wait to apply for a mortgage after missed payments?
Ans: If the missed payment occurred over 12 months ago, your chances are significantly higher. Some lenders may even consider applications within 6 months if you can demonstrate financial improvement.
Q 2: Do all lenders consider missed mortgage payments?
Ans: No, but many specialist lenders and some high street banks are open to applicants with missed payments, especially if the issue is resolved.
Q 3: Can I get a mortgage with multiple missed payments?
Ans: Yes, though you may need a larger deposit and should work with a broker to find the right lender.
Professional Contractor Mortgage Guidance
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Schedule your consultation today. We’ll discuss your circumstances, explain your options, and provide honest advice about the best approach for your contractor mortgage application.
