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Will Late Payments Affect my Mortgage Application?

Will Late Payments Affect my Mortgage Application?
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Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin16 Dec 2023

Will I Have a Mortgage Declined Due to Late Payments?

Late payments can make it harder to find a mortgage but are a relatively minor credit issue and not certain to result in having a mortgage declined due to late payments. There is usually a solution, whether applying to a more flexible lender or considering a specialist bad credit mortgage.

This guide will explain how mortgage providers will assess late payments and how that differs from other credit issues – and when you may have a mortgage declined due to late payment history.

For more help with a mortgage after late payments or with any credit history issues, give the mortgage brokers team a call on 0330 304 3040, or email us at [email protected].

What Credit Issues Can Result in a Mortgage Declined Due to Late Payments?

A late payment can mean any repayment on any financial account that was late and has now been paid.

Having a mortgage declined due to late payments isn’t the same as being in arrears - that means owing more than this month's payment. Mortgage arrears show on your credit report as how many months behind you have fallen.

Can I Get a Mortgage if I’ve Previously Had a Mortgage Declined Due to Late Payments?

You can get a mortgage even after having a mortgage declined due to late payment history provided you work with an independent broker. Lenders will consider multiple factors such as:

  • Credit report and type of issues.
  • How many late payments you had.
  • When the late payments occurred.
  • How serious any arrears were.
  • Whether you have additional credit issues.
  • How much deposit you have available.

The key is to apply to a lender who you know is in a position to consider your application if you’ve had a mortgage declined due to late payments. While having late payments will always make you less creditworthy, having one late payment in the last six years isn't likely to be a massive problem.

However, recent and repeated late payments can be a red flag and mean greater exposure to having a mortgage declined due to late payment records.

Why Have I Had a Mortgage Declined Due to Late Payments?

Just because one lender advises you’ve had a mortgage declined due to late payments doesn't mean that another won't be happy to accept it! It is vital not to send out multiple applications or start making enquiries with any lender since having lots of hard credit searches and rejections on your credit report can compound matters.

It is essential to seek expert support from an independent broker who can steer your application in the right way with the right lender if you’ve had a mortgage declined due to late payment history issues.

Can I Get a Mortgage After Mortgage Declined Due to Late Payments on Another Mortgage Product?

As with other credit history issues, late payments and arrears are very different circumstances. If you ever think you might struggle to make a mortgage repayment on time, the first step is to contact your lender as quickly as possible. If, for example, they can offer a payment holiday, you might avoid having a black mark on your credit file altogether.

Late mortgage payments are usually reported within one week and 15 days of the due date. You will also usually incur a late fee as a penalty and may have a future mortgage declined due to late payments.

Most mortgage providers do offer a grace period. For example, if your mortgage is due for payment on the 1st of the month, you might get 15 days grace and provided you make the payment in that time, it won't be reported for late payments.

Mortgage arrears are more serious than the potential to have a mortgage declined due to late payments. Late payments on loans such as mobile phones or utility bills are often disregarded, with late payment problems escalating in importance to personal loans and credit cards, then to secured loans and mortgages.

Arrears mean that you fall behind with your debt rather than are late with one or two payments. In this situation, you can usually find a mortgage through an experienced lender but will be offered less competitive rates and typically need to have a deposit of at least 15% - 25%.


What is the Best Action if I Receive a Late Payment Demand and Am Worried About Getting My Mortgage Declined Due to Late Payments?

Late payment letters are issued as a reminder, and so the key is to take action and see if you can get back on track as quickly as possible before you have a mortgage declined due to late payment history problems.

Never ignore a late payment demand since it can damage your credit score further, plus incur late payment charges, fines and penalties and increase the potential of having a mortgage declined due to late payments.

Missed payment letters are usually an early reminder. Letters advising that you are approaching court action or are now in arrears or default are more serious.

What Can I Do If My Mortgage Payment is Late This Month?

First, if you know you're going to be late with a payment, contact your lender immediately. They can usually offer a solution such as extending your mortgage term, switching you over to interest-only on the short-term, or providing a temporary arrangement – without meaning you’ll have a mortgage declined due to late payments in the future.

You can also consider help with Income Support, Universal Credit or Employment and Support Allowances if you are eligible and have had a mortgage declined due to late payments.

Am I Likely to Get a Mortgage with Late Payments?

It’s possible you’ll have a mortgage declined due to late payment history and much depends on how recently your late payment occurred and whether they were a standalone issue or an ongoing problem.

Lower deposit mortgages requiring a 5-10% down payment are usually available after late payments, provided a year or two has passed.

Expert Advice with Mortgages and Late Payments

Having late payments on your file doesn't exclude you from applying for a mortgage. Although most high street banks won't approve your application, there are plenty of niche lenders and bad credit specialists who can help without advising you have had a mortgage declined due to late payment factors.

If you're unsure whether your late payments are likely to be a mortgage issue or would like help comparing the rates on the market after having a  mortgage declined due to late payments give Revolution a call on 0330 304 3040 or email us at [email protected].

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.