Published 13 August 2020 · Last reviewed 13 August 2020 · Older article — see current rates
How do mobile phone missed payments affect my chances of getting a mortgage?
Mortgages with mobile phone missed payments are probably easier to get than any other form of missed payments. This is because mobile phone companies tend to jump to on missed payments, particularly as it’s not uncommon for phones to cost between £500 and £1,000, and they have little chance of getting the phone back in the event of default. It’s an effective method of alerting their other branches and their industry that this person is a bad risk for future phone contracts.
When assessing mortgages with mobile phone arrears the lender will look closely to make sure the contract is recorded as “communications” on the credit report. Depending on the structure of the some mobile phone contracts will be registered as “loans” and missed payment on loans will typically be viewed more dimly from a mortgage perspective.
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The credit report will show the number of missed payments on the mobile phone, and these are known as “Statuses”. The higher the number the greater the chances of being declined for a mortgage. If the Status hits ‘6’ then it’s likely to be morphed into a default. Mortgages with mobile phone arrears that have reached default status are harder to come by.
Mortgages with mobile phone missed payments in more detail
I’m a professional Mortgage Broker and regularly arranges mortgages with mobile phone arrears. The lender choice is not normally impacted if the Status was no more than ‘2’ and the issue arose over 3 years ago. When you get inside of the last 3 years then matters get hazy and you really need to enlist the professional help of a Mortgage Broker who can access the whole market.
Credit scoring is a tool used by standard mortgage lenders to screen cases they do not want. Generally mobile phone arrears will have a detrimental effect on the Mortgage Lender’s rating. For example Principality Building Society requires an ‘A’ grade credit score on buy-to-lets. This is the sort of information a professional Mortgage Broker who is active placing mortgages with mobile phone arrears might know and it could save you a lot of time shooting in the dark.
Also Mortgage Brokers can help with mortgages with mobile phone arrears via specialist “off high street” lenders such as Aldermore* and Kensington* who normally ignore these altogether, even if they have resulted in recent defaults. The Mortgage Lender* is the same but has temporarily paused residential lending due to COVID-19. Others such as Buckinghamshire*, Bluestone and Pepper* ignore recent mobile phone arrears within certain tolerances.
{* Source Knowledge Bank 9 Aug 2020} – Need to check Aldermore as cannot see this on their guide.
Conclusion – Mortgages with Phone missed payments
It can be easy to be turned down for a mortgage if you have credit problems. The last thing you need is another needless credit search on your record as this may move your rating lower still. It is sensible to ask for help. At Niche Advice we do NOT charge our customers until the mortgage has been fully approved. It’s the right and fair thing to do and hopefully demonstrates we have confidence in our ability.
If you want to know more about getting a mortgage with bad credit please click here