Mortgage arrangement

Ramid100

Hi there.
About 5 months ago my mortgage came out of its fixed rate and onto a much higher deal. The house was going through a sale and I could only pay the existing amount, which was 'arranged' in advance with the bank. This would have been fine but the sale fell through as the buyer backed out. For one month as the sale fell through I paid the arranged amount but late. This broke the arrangement.
I sorted out my finances, and have taken the property off the market for a while while I get myself into a better position. After the month it fell through I have paid the mortgage in full at the new, higher amount. My problem is that the bank have been contacting me asking me to repay the arrears, which I have offered to make a small contribution on top of my payment in order to do so. However, the bank says until this is paid, my all my subsequent payments will only ever be shown as 'arrangements' on my credit report (AR) even though I am now paying in full, on time, with a small overpay contribution. The bank will not now let me take another, better deal with them and I will be stuck on the SVR for some time.
This is going to seriously hurt my credit file in the future and affect my ability to get a new mortgage when I move.
I know I am responsible here but I am asking for any advice in repairing the situation as quick as possible (repaying the arrears in full is not a possibility right now), and wondered if anyone had been in a similar situation and had gone back to the bank to query the credit report markers, or how they repaired there credit for a future mortgage.
Thank you in advance.

MEM62

Ramid100 wrote: »

repaying the arrears in full is not a possibility right now

As far as I know, this is the only thing that will prevent further negative markers on your credit history.

It might be worth talking to your current lender to see what they can do on a future mortgage - at least you already have a relationship with them.

Thrugelmir

Pay whatever you are able towards the arrears every month. To achieve this go through your budget and scrimp together every penny you are able.

Are you proposing to downsize as part of your plans? If so, then your existing lender should be willing to assist you achieve this. Though the numbers will obviously have to stack up as far as affordability is concerned.

National_Debtline

Depending on the situation with your equity you may be able to ask the mortgage lender to capitalise the arrears - effectively rolling the arrears onto the end of the term of the mortgage. This will make the monthly instalments slightly higher than the contractual minimum payment but may not be that much different to what you are paying now (and at least then it would be classed as being up to date).


Adjusting your mortgage in anyway can have long term implications on affordability so it may be a good idea to take full advice before proposing this to the mortgage lender.


Laura
@natdebtline