It’s not unusual to miss the odd payment here or there, especially if times have been tight. But evidence of multiple missed or late payments on your credit file will have an adverse effect on your credit score and may affect your ability to secure a mortgage on a new property.
If you’re worried that your money problems may prevent you from moving, we’re here to tell you that all hope is not lost. There are some mortgage providers out there with more accommodating lending criteria who may be willing to consider your case. It’s just a case of tracking them down and putting together a strong application that proves you have the ability to meet your repayment schedule, despite your past issues.
Things to consider when moving between properties
A home mover is someone who already has a mortgaged or owned home and is moving into a new property. As a home mover, you can choose to ‘port’ your mortgage with your existing lender or apply for a mortgage with a different provider. Your mortgage broker will be able to advise you on the best option, based on your repayment history and the terms of your current agreement.
As a home mover, you are likely to have some general knowledge when it comes to finding the right mortgage and dealing with brokers. Whilst costs are important to you, you’re focusing on other factors for your move, such as achieving new lifestyle goals; upsizing to meet the demands of your growing family; or changing location due to work or family commitments.
You’re in a much stronger position than a first time buyer, because you have evidence of your ability to pay your mortgage repayments in full and on time, every month. This will put you in a favourable position when it comes to getting a good interest rate. You’re also likely to have built up some equity in your existing property, meaning you’ll be entering into a new agreement with a better loan-to-value (LTV) than before.
One of the most common problems that home movers experience is being stuck in a chain. This is the term used for a sequence of linked home purchases who are reliant on each other for the preceding and succeeding purchases; for example, those buying your house are reliant on you completing on your new home in order to move into your old one.
It’s important to stay in contact with your solicitor throughout the moving process to ensure everyone is kept up to date with potential move dates and any delays are communicated up and down the chain.
How will missed or late payments on your credit file affect your chances of getting a mortgage?
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 on your next property.
Late and 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 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 on your finances and offer the best possible rates given your circumstances.
Why use a mortgage broker?
Don’t jeopardise your big move by failing to seek advice. Our expert mortgage brokers are available now to chat through your options and provide you with free, no-obligation quotes from lenders who may consider applications from customers with evidence of missed or late payments.
There are plenty of benefits to working with the team here at CLS Money. Not only will you be able to access whole-of-market deals, you’ll also receive a truly stellar service throughout the entire mortgage process. We’ll be on hand to help you collect all the documentation you need – and, once your application has been accepted, we’ll even liaise with the provider on your behalf to ensure your home loan is in place ready for completion.