Mortgages with Arrears

Steven Neale
By Published On: December 2, 2019Last Updated: May 10, 2024

Can I get a mortgage with Arrears?

If you’ve had debt arrears, whether secured or unsecured, you’d be right to assume this would make getting a mortgage more difficult than normal. Most high street lenders would not consider your application. This is where a specialist adverse credit mortgage advisor, such as myself, comes in. I work with a wide range of adverse lenders who can offer mortgages to those who have been in arrears.

How much can I borrow on a mortgage with arrears?

Borrow up to 75% with unlimited mortgage, secured or unsecured payments, provided you have not missed payments within the last 12 months and any missed before then are paid up to date. 

What arrears can I have for a mortgage? 

Arrears fall into two camps and are treated differently:

  • Unsecured – if late or missed payments are from a credit card or car loan for example, and are not secured on your property (unsecured) they are counted when the lender carries out a credit score on you. Your score will determine what interest rate the lender will charge or if your score is too low, they may decline you for a mortgage altogether.
  • Secured – loans secured on a property such as a Mortgage or Second Charge are treated differently with lenders looking very closely at your payment history. 

What if I only have one missed payment?

Missing the odd payment on a credit card they will accept – missing payments with your current mortgage lender or on a secured loan is not a good start when trying to impress a new lender.

Generally though, you can have 1 missed or late payment in the last year with no more than 3 missed or late in 3 years up to 85% loan to value.

If however you have a reason for going above these limits such as redundancy or illness, or the missed payments were of a short duration and your credit before and afterwards was OK, I know Building Societies who might consider you for a mortgage if you have arrears.

Will lenders credit check my mortgage application?

They underwrite manually, meaning they do not rely on a computer or credit score and each application is individually assessed by an underwriter. This approach works well if you can demonstrate your adverse history of arrears was short lived, for a clearly identifiable reason and since then you have conducted your finances well.

When it comes to your credit worthiness, always ensure you make the monthly payments on time, every time, Avoid any arrears if you plan to remortgage or purchase a new home in the future.

Using a broker for a mortgage with arrears

Getting a mortgage with arrears requires an understanding of lending criteria from different mortgage providers. Using a specialist broker can help with this, as the broker will know each lender’s individual criteria, allowing you to choose the right lender first time, and get the best deal available for your given situation.

For more information on how I can help you find a mortgage when you have arrears, please call me on: 01494 526400 or complete my online Enquiry Form.

Mortgages with Arrears

Steven Neale
By Published On: December 2, 2019Last Updated: May 10, 2024

Can I get a mortgage with Arrears?

If you’ve had debt arrears, whether secured or unsecured, you’d be right to assume this would make getting a mortgage more difficult than normal. Most high street lenders would not consider your application. This is where a specialist adverse credit mortgage advisor, such as myself, comes in. I work with a wide range of adverse lenders who can offer mortgages to those who have been in arrears.

How much can I borrow on a mortgage with arrears?

Borrow up to 75% with unlimited mortgage, secured or unsecured payments, provided you have not missed payments within the last 12 months and any missed before then are paid up to date. 

What arrears can I have for a mortgage? 

Arrears fall into two camps and are treated differently:

  • Unsecured – if late or missed payments are from a credit card or car loan for example, and are not secured on your property (unsecured) they are counted when the lender carries out a credit score on you. Your score will determine what interest rate the lender will charge or if your score is too low, they may decline you for a mortgage altogether.
  • Secured – loans secured on a property such as a Mortgage or Second Charge are treated differently with lenders looking very closely at your payment history. 

What if I only have one missed payment?

Missing the odd payment on a credit card they will accept – missing payments with your current mortgage lender or on a secured loan is not a good start when trying to impress a new lender.

Generally though, you can have 1 missed or late payment in the last year with no more than 3 missed or late in 3 years up to 85% loan to value.

If however you have a reason for going above these limits such as redundancy or illness, or the missed payments were of a short duration and your credit before and afterwards was OK, I know Building Societies who might consider you for a mortgage if you have arrears.

Will lenders credit check my mortgage application?

They underwrite manually, meaning they do not rely on a computer or credit score and each application is individually assessed by an underwriter. This approach works well if you can demonstrate your adverse history of arrears was short lived, for a clearly identifiable reason and since then you have conducted your finances well.

When it comes to your credit worthiness, always ensure you make the monthly payments on time, every time, Avoid any arrears if you plan to remortgage or purchase a new home in the future.

Using a broker for a mortgage with arrears

Getting a mortgage with arrears requires an understanding of lending criteria from different mortgage providers. Using a specialist broker can help with this, as the broker will know each lender’s individual criteria, allowing you to choose the right lender first time, and get the best deal available for your given situation.

For more information on how I can help you find a mortgage when you have arrears, please call me on: 01494 526400 or complete my online Enquiry Form.

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Anon – 4th March 2024

Steven and Sue have been absolutely wonderful throughout the whole mortgage application process. Even when we were unsuccessful with our first application which left us panicking, Steven remained calm and professional, informed us there were plenty of other options and worked quickly on a new application suited to our needs. Steven would answer his phone efficiently and if he missed us, he would call back immediately, something which can be quite rare these days. We would recommend Steven and Sue to anyone that maybe struggling with the whole mortgage process, especially the self employed, they took all the stress from us and deserved every single penny we payed them. We will absolutely be returning to Steven and Sue in the future and only wish we had found them sooner. We found them to be invaluable and an absolute pleasure to deal with, they are the reason we can finally sleep well at night! Thank you both again.

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Anonymous – 6th February 2024

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Martin – 2nd January 2024

I have felt very well looked after throughout this process, and advocated for, to meet my individual financial needs. The communication between Steven, Sue and I has been of the highest standard, and I could not have asked for more. I was treated without prejudice, and with understanding, and I am so happy that I have been able to buy a home which my daughter and I can now settle into, and start a new chapter. Thank you so much Steven and Sue!

Hentschell – 21 November 2023

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