Mortgage When in Arrears
Borrow up to 75% with unlimited mortgage, secured or unsecured payments, provided you have no missed payments with the last 12 months and any missed before then are paid up to date.
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 2nd charge are treated differently with lenders looking very closely at your payment history. 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.
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 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, if you plan to remortgage or purchase a new home in the future.