These days, most lenders understand that missed or late payments are common and certainly not the most severe type of credit issue.
But different mortgage providers have different means of assessing your eligibility for a loan. This is why it’s so important to shop around for the best possible rates and terms from a company that you know is going to be more accepting of your situation. After all, the last thing you want to do is apply to multiple unsuitable providers and run the risk of damaging your credit profile further.
What to consider when applying for a Buy to Let mortgage
A Buy to Let (BTL) mortgage is designed for people who are looking to purchase additional property and rent it out in order to make a profit on their initial investment. In the UK, there are no limits on how many properties one person can own – so, as long as you understand your responsibilities and duties as a landlord, it can be an incredibly lucrative way to generate capital.
When looking for a Buy to Let mortgage, price is a very important factor, as it will directly affect the viability of your investment. When working out how much you can afford, you will need to consider how much you will need to set aside for the payments on your residential mortgage (if you have one), as well as any other financial commitments that could affect your ability to keep on top of your BTL mortgage repayments. Remember, too, that Buy to Let deposits are significantly larger than those for a standard residential mortgage. You will usually need a bigger down payment to not only secure a mortgage in the first place but access the most competitive rates.
Buy to Let mortgages have been notoriously difficult to obtain in the past due to stringent income and affordability checks, not to mention volatile markets. For the best chance of success, it’s important to explore all your available options before making a decision on which lender to use.
How will missed and late payments affect your BTL mortgage application?
Lenders consider a late payment as a payment that was not settled within the deadline given to you by your creditor but was paid off within a month after this cut-off date.
Missed payments, on the other hand, are those which were not paid at all.
Missed or late payments on any existing credit agreements can have a big impact on your credit score. In fact, they can often make it very difficult for you to be accepted for a mortgage.
Late or missed payments will stay on your credit report for six years, so any lender reviewing your credit history within this period of time will need to bear them in mind when deciding whether or not to lend to you. There are different levels of severity for missed and late payments; missed and late utility bills have the least impact on your credit score, while missed and late mortgage payments are much more serious. But different lenders will have different rules and criteria that govern how they assess the effect these will have on your application.
If you know that you have missed or late payments to your name, you should consider working with a specialist mortgage broker. They will be able to introduce you to lenders who are prepared to take a view of your finances and offer the best possible rates given your circumstances. Working with specialist mortgage brokers, it's possible to find a mortgage lender understanding of those late or missed payments, leading to a successful mortgage application however your credit report looks.
Why use a mortgage broker?
So, getting a mortgage with late and missed payments on your credit file is not out of the question. You’ll just need to look in the right places and perhaps be prepared to pay slightly higher rates while you nurse your credit score back to health.
The team here at CLS Money can help you track down the most attractive deals from providers with a history of lending to customers in similar situations to yours. We can search the whole of the market to find a suitable product, which means we can compare everything that’s on offer from bigger banks and more specialist companies alike.
Take the first step towards your next investment today. Book a free, no-obligation consultation with one of our expert Buy to Let mortgage advisers and see what’s possible.
CLS Money are here for every mortgage situation
We understand that life isn't always as straightforward as we'd like. When it comes to securing mortgage approval for a buy to let investment or to own your own home, we're here to help. That includes those struggling to achieve mortgage approval from the high street lenders. Missing the due date and failing to make payments on unsecured loans, personal loans, utilities, a direct debit, a credit card bill or even to your existing or previous mortgage lenders doesn't mean you can't find approval from one of our specialist mortgage lenders.
A missed payment or any other bad credit issue doesn't have to affect your mortgage application and end your project. We work with specialist lenders that dig a little deeper into your situation, whatever your credit report, finding you a mortgage deal you can manage. And with no more late payments, you can start working on your credit rating, getting back to where you need it for your next investment project!
Getting a mortgage with bad credit
Beating your existing mortgage
Assistance with mortgage arrears
More manageable mortgage instalments
Mortgage options for those with financial difficulties
Mortgages for borrowers with County Court Judgements
Offering all kinds of alternative deals to the mainstream lenders
Larger deposit mortgages
Mortgages for all types of credit history
When you need to seek specialist advice, CLS Money is ready to listen. We understand that a clean credit file isn't always easy to maintain, yet you still deserve the right to invest in the property you need. When it comes to unusual mortgage situations, CLS will match each situation to its unique lender criteria, delivering happier customers and the better your chances of success.