What Happens If You Miss a Mortgage Payment? – The Complete Guide
Are you worried about what will happen if you miss a mortgage payment? Or maybe you’re already late with your mortgage payments.
Whatever your circumstances, Simply Adverse is here to tell you everything you need to know.
Missed Mortgage Payments
Missed and late mortgage payments happen. Maybe you’ve got into financial difficulty. Maybe you accidentally missed a mortgage payment. The bottom line is, while late and missed payments can be a problem, the size of that problem will depend on various factors. If you’ve wondered “will late payments affect a mortgage application”, it’s worth remembering that it may be one of the details that mortgage lenders take into consideration when assessing any application.
Missed Mortgage Payments FAQs
1. What is a late mortgage payment?
2. What is a mortgage grace period?
4. Are mortgage arrears & late payments the same?
5. Will missed mortgage payment affect my credit score?
6. Is missing mortgage payments worse than missing payments on other bills?
7. How many months mortgage arrears before repossession takes place?
8. What happens if you miss a mortgage payment in the UK?
9. Do missed payments affect mortgage applications?
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Missed Mortgage Payments FAQ Answers
1. What is a late mortgage payment?
A late payment is any payment that is made after the date set by your mortgage lender when the mortgage is first taken out. Most lenders will give mortgage holders a ‘grace period’.
2. What is a mortgage grace period?
A grace period is the amount of time you have after your mortgage payment due date to make a payment before any late fees are applied. This is different for different lenders and can vary between 5 to 15 days.
3. What are late fees?
Late fees may be imposed by your lender if you haven’t made your mortgage payment within the grace period, or if your mortgage is in arrears. Late fees are generally set as a percentage of your regular monthly payment.
4. Are mortgage arrears & late payments the same?
Any payment made after the monthly due date is a late payment. Once you are more than 30 days late with a payment you are in arrears.
5. Will missed mortgage payment affect my credit score?
Any payment made a month or more late will show on your credit report. The late payment is marked with a 1,2,3 etc to show how many months late the payment was. The more missed payments on your credit report – for example if you have missed payments for other debts – the more difficult you may find it to get a mortgage in the future.
6. Is missing mortgage payments worse than missing payments on other bills?
Mortgages are a secured loan. Generally, lenders are more concerned with missed payments on secured than unsecured loans.
7. How many months mortgage arrears before repossession takes place?
Lenders won’t start repossession proceedings until you’re at least 3 months in arrears. However, all lenders are bound by a set of rules they must abide by before they start court action. In addition, lenders would rather find a way of you repaying your mortgage than go down the repossession route. For this reason, you should try to come to an arrangement with them as soon as you can.
8. What happens if you miss a mortgage payment in the UK?
Your lender will usually contact you within 15 days of any missed mortgage payment. This is your opportunity to come to a mutually agreed arrangement. If possible, you should try to contact your lender as soon as you know that you may have trouble making a payment.
9. Do missed payments affect mortgage applications?
When you make a mortgage application, lenders use your credit history as part of the information they use to assess your suitability for a loan. As late and missed mortgage payments appear on your credit report, you may find it more difficult to get a mortgage with missed payments.
10. How long do mortgage arrears stay on a credit file?
Mortgage arrears stay on your credit report for 6 years.
11. Will I have a mortgage declined due to late payments?
As late payments affect your credit score it’s possible, it will vary from lender to lender, but they could lead to a mortgage application being declined.
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How Simply Adverse can help
Speaking to the specialist mortgage brokers at Simply Adverse will maximise your chances of successfully applying for a mortgage, even with arrears and late payments. If you need to know “can you get a mortgage with late payments” we can tell you what your chances are and match you with mortgage lenders who accept late payments.
Tips to avoid getting into mortgage arrears
1. Make sure you’ve set up a standing order for your mortgage payments. Don’t rely on your memory.
2. Check you have enough funds in your bank to meet your standing order or direct debit. Always budget to ensure you can meet your monthly payments.
3. Act early. If you think you’re likely to get behind with your mortgage payments, contact your lender. They may be able to head off any problems via payment holidays or a period of interest only payments.
If you’ve missed a mortgage payment the consequences may not be as serious as you think. There are many variables that lenders look at when making a mortgage decision.
Whatever your circumstances, Adverse is all we do. With over 2,500 5-star reviews, talk to Simply Adverse today.
Call 01245 330163 For A Free Quote
Lines Open: Mon-Fri 9am-10pm and Sat/Sun 9am-5pm. Alternatively request a call back at a time convenient to you.
It’s quick & easy. No credit check.