Securing a Mortgage with Past Arrears: Steps to Success

Jun 09, 2024

Understanding Past Arrears

Past arrears can make securing a mortgage seem daunting. Lenders see arrears as a sign of financial risk. But, it is still possible to get a mortgage with the right steps. First, understand what arrears are and how they affect your credit score.

Arrears occur when you miss payments on loans or bills. This can be due to various reasons like job loss or unexpected expenses. Lenders will look at the reasons and the steps you took to resolve them.

financial planning

For a mortgage, review your credit report. This will help you understand your financial standing. Look for errors and rectify them. Ensure all past arrears are accurately reported and settled.

You can get a free credit report from Checkmyfile. Check your report for any discrepancies. If you find errors, contact the credit agency to correct them.

Improving Your Credit Score

Improving your credit score can increase your chances of securing a mortgage. Pay off any outstanding debts. Avoid taking on new debts. Make all your payments on time. These actions will show lenders that you are responsible with your finances.

credit score

Cut unnecessary expenses and save diligently. Consider setting up a separate savings account for your deposit. This will help you track your progress and stay motivated.

Seeking Professional Advice

Consult a mortgage broker such as Mortgage321 for professional advice. They can guide you through the process and help you find suitable lenders. Brokers have access to a wide range of mortgage products and can negotiate better terms for you.

Be honest with your broker about your past arrears. They can provide tailored advice and solutions based on your situation.

mortgage advice

Provide evidence of your efforts to improve your credit score. This will demonstrate your commitment to financial responsibility.

Exploring Specialist Lenders

If mainstream lenders reject your application, consider specialist lenders. These lenders cater to people with past arrears. They may offer higher interest rates, but they provide an opportunity to secure a mortgage.

Research different specialist lenders and compare their terms. Choose one that best fits your needs and financial situation.

Staying Positive

Securing a mortgage with past arrears is challenging but not impossible. Stay positive and persistent. Follow the steps outlined above and seek professional help from Mortgage321 when needed. With patience and effort, you can achieve your goal of homeownership.