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real effect of late payments
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midlander81
Posts: 205 Forumite
Hi Guys,
I know that late payment markers are on your credit file for 6 years and that they can affect you from getting mortgages ( or other credit).
Lets say if someone had lots of late payments like 10+ ( only '1' markers) on their credit file BUT all of these were 2-3 years old and they had made all payments on time since. How difficult would it be to obtain a mortgage? Would it make a difference if the person is a high earner with a good deposit (30%)
Does the fact the late payments happened 2-3 years ago make a significant difference?
I know that late payment markers are on your credit file for 6 years and that they can affect you from getting mortgages ( or other credit).
Lets say if someone had lots of late payments like 10+ ( only '1' markers) on their credit file BUT all of these were 2-3 years old and they had made all payments on time since. How difficult would it be to obtain a mortgage? Would it make a difference if the person is a high earner with a good deposit (30%)
Does the fact the late payments happened 2-3 years ago make a significant difference?
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Comments
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Yes it does make a difference.
The history you describe would still be a problem with many lenders but a good broker would find a number of options.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Thanks amnblog. Perhaps I am naïve but don't most people have a late payment marker here and there? None of us are perfect and it is easily done when you are leading a busy life. Seems really harsh.0
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Most people pay everything in full and on time.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
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midlander81 wrote: »You've only got to look at the DFW/credit cards/Loans board to see that many many people have some degree of unsecured debt.
If they've a direct debit or standing order set up there's no reason not to make a payment on time.
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midlander81 wrote: »Thanks for reply.
Is this really true though?? Especially regarding paying everything in full. You've only got to look at the DFW/credit cards/Loans board to see that many many people have some degree of unsecured debt.
There is a huge difference between having unsecured debt and not making the minimum payment. No problem with the debt and some is good, missing payments because you can't plan your life is not. If you can't pay the credit card on time, why should a potential mortgage company take it on trust you will pay a mortgage.
Some people live their whole lives like that, paying charges and late payment fees which is very profitable for the banks btw. Others wake up and smell the coffee, instead of paying late fees use the money to reduce the debt.
If you are going to apply for a mortgage, do make an effort to reduce the overall amount owed during the last year - this does count.0 -
Thrugelmir wrote: »If they've a direct debit or standing order set up there's no reason not to make a payment on time.
They would then become a money saving expert :money:0 -
midlander81 wrote: »Thanks for reply.
Is this really true though?? Especially regarding paying everything in full. You've only got to look at the DFW/credit cards/Loans board to see that many many people have some degree of unsecured debt.
Most of the population get on with paying the modest unsecured debt they take out from time to time.
Obviously the debt discussion on this forum is going to be of a more dramatic nature.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
There is a huge difference between having unsecured debt and not making the minimum payment. No problem with the debt and some is good, missing payments because you can't plan your life is not. If you can't pay the credit card on time, why should a potential mortgage company take it on trust you will pay a mortgage.
Some people live their whole lives like that, paying charges and late payment fees which is very profitable for the banks btw. Others wake up and smell the coffee, instead of paying late fees use the money to reduce the debt.
If you are going to apply for a mortgage, do make an effort to reduce the overall amount owed during the last year - this does count.
move on 15 years from 2000 on a mortgage, take into account the recession, redundancies ,lack of employment.. I bet there are many people who have had late payments , be it only one or two over that period..
The new rules regarding mortgages completely dismiss those who have managed to pay their existing mortgage (sometimes for years) with the odd late payment which has been brought up to date within a few months and also have paid the penalties to their lender but are now looking to remortgage and cannot get a decent rate from their own or other mainstream lenders..0 -
The "new rules" you describe are all about affordability.
Nothing happened in April 2014 which changed lenders' approach to late payments on unsecured credit.
Some accept then, some don't.
If you want to consider mortgage arrears in isolation, lenders have never treated these lightly.
The transitional arrangements I think you are referring to did not include those who had missed any mortgage payments.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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