Mortgage With Arrears Your Options Explained
Quick answer: Arrears — whether on a current mortgage, credit card or personal loan — do not automatically prevent you from getting a new mortgage. The key factors are whether the arrears are historical or current, how much was owed, and whether they have since been cleared.
🏦 What Lenders Look At
- Whether the arrears are current or historical
- The amount of arrears and how many months they represent
- Whether the arrears have been cleared
- How long ago the arrears occurred
- The reason for the arrears
❓ Common Questions
Can I remortgage if I have current mortgage arrears?
More difficult but not impossible. Some specialist lenders will consider a remortgage where there are current arrears particularly to reduce monthly payments.
Can I get a mortgage if I have arrears?
Yes but it requires specialist lenders who assess the full context of the arrears. Key factors include what type of account the arrears are on how much the arrears amount to how long ago they occurred and whether they are now cleared. Darryl Dhoffer will review your credit file and identify which specialist lenders will consider your specific arrears situation.
Are mortgage arrears worse than other arrears?
Yes significantly. Mortgage arrears show a lender that you have previously struggled to meet payments on a mortgage which directly undermines confidence in your ability to meet future mortgage payments. However even mortgage arrears can be overcome with the right specialist lender particularly as time passes and the arrears are cleared.
How long do arrears stay on my credit file?
Arrears are recorded on your credit file for 6 years from the date they were first recorded. As they age they have progressively less impact. After 2-3 years most specialist lenders treat historic cleared arrears much more favourably. After 6 years they drop off your file entirely.
What is the difference between arrears and a default?
Arrears are an ongoing shortfall in payments. A default is formally registered when a lender decides to close an account due to persistent non-payment typically after 3-6 months of arrears. A default is more serious than arrears on your credit file. It is possible to have arrears without a default if you have since caught up with payments.
How much deposit do I need with arrears?
This depends on the severity and age of the arrears. Recent mortgage arrears typically require 25%+ deposit. Historic cleared arrears from 2+ years ago may be accepted with 10-15% by some specialist lenders. Darryl will advise on exactly what deposit is needed for your specific arrears situation.
How many months of arrears can I have and still get a mortgage?
There is no fixed limit. 1-2 months historical arrears is manageable. 6+ months requires specialist matching. The key is whether they are now resolved.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP YOUR REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER LOAN SECURED AGAINST IT.
This page is for general information only and does not constitute regulated financial advice. The Mortgage Geezer is a trading style of Access Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 301173. Registered in England No. 04427489. Registered office address Access Financial Services Ltd, Unit 1 Furtho Court, Towcester Road, Old Stratford, Milton Keynes, MK19 6AN.