End of Interest Only Mortgage - Credit Report

gizmo111

Good Afternoon,
I have an IO mortgage that ends on 30 September - however sale of property is taking a little longer than anticipated and it looks like completion will not be until end Oct - possibly early Nov.  No problem with extending until house sold, however lender is unable to say how this will show on credit report - late payment or up to date.  Issue is new mortgage is needed to buy next property and if its showing as late payment on credit report then this will affect the move. 
Does anybody know how this extension will show on report?
Thanks 

Mark_d

So you come to the end of your 25 year mortgage term in September?  Why would it be a late payment if you pay when the  money is requested?

gizmo111

Mark_d said:

So you come to the end of your 25 year mortgage term in September?  Why would it be a late payment if you pay when the  money is requested?

Because it is unlikely that house sale will complete by end of Sept - more likely end Oct/Nov

eschaton

gizmo111 said:

Mark_d said:

So you come to the end of your 25 year mortgage term in September?  Why would it be a late payment if you pay when the  money is requested?

Because it is unlikely that house sale will complete by end of Sept - more likely end Oct/Nov

Rad the post above your post. 

eschaton

The only way there will be a late payment marker is if you stop making payments. 

gizmo111

eschaton said:

The only way there will be a late payment marker is if you stop making payments. 

Even though the term has ended - I'll be late paying full balance -   How will this show on credit report? 
 I'll obviously carry on making the interest payments until completion and mortgae is repaid in full.

HobgoblinBT

It should be straightforward.  Your date to repay your mortgage by is 30th September. If you repay the loan on 1st October or later you are in arrears as you have failed to repay the mortgage loan.  How and when that is reported is another matter.  When I worked in banking a loan did not report as delinquent to any external bodies such as credit reference agencies for about a month. So although you may be in arrears, this fact may not actually report on your credit report.

 In practical terms, you can explain the delay to your new lender with information that they can easily verify ie the the delay in completion in your sale and purchase for a short period beyond the original mortgage repayment date so if referred to an underwriter at your new lender they will likely agree that the loan presents no further risk of default to them than when originally approved and proceed with the loan.

lfc321

If I understand your first post correctly, the lender has said they are happy to extend the mortgage until your house has sold(?). You’ll therefore continue to pay interest during that period, and will effectively have a new mortgage end date. 

If that’s right (get it in writing), then I don’t see that you would be making any late payments, providing you pay the additional weeks/months of interest on the dates due. 

MWT

lfc321 said:

If I understand your first post correctly, the lender has said they are happy to extend the mortgage until your house has sold(?). You’ll therefore continue to pay interest during that period, and will effectively have a new mortgage end date. 

If that’s right (get it in writing), then I don’t see that you would be making any late payments, providing you pay the additional weeks/months of interest on the dates due. 

They are not going to create a new mortgage for this, and the original concern is valid as the lender is obliged to accurately report if the mortgage was paid on time, which it will not have been...

It is the same issue that others have encountered where they make an arrangement to pay late, or catch up over time and are then surprised to see the arrangement appear on their credit report.

The lender confirming that it will be OK to settle the mortgage a month or two late, does not mean the lender will not report the late payment as they are obliged to do.