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Mortgage Declined Due To Late Payment

Not sure how to proceed after your mortgage application got declined due to previous late payments? Keep reading to understand why it happened and how you can deal with it!
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It is understandable to get frustrated if your history of late payments is the main culprit behind your mortgage application rejection. 

There can be various reasons why you were caught in a chain of late payments, ranging from forgetfulness to financial problems. 

When lenders assess your mortgage application, they may not be sure about the specific reason behind your inability to pay sums on time – leading to increased chances of rejection. 

In this blog post, we will check out various aspects of mortgage declined due to late payment. 

We will see how exactly these late payments affect the applications and how you can overcome this issue.

Will Late Payments Affect Mortgage Application?

Yes, late payments can affect your mortgage application. Lenders see them as a risk, potentially leading to higher interest rates or declining applications. Maintaining a good payment history is crucial to improve your approval chances.

How Do Late Payments Affect Mortgage Application?

Depending on the cause and the severity of your late payments, there can be varying effects on your mortgage applications. 

Understanding how these aspects affect your application can lower your chances of rejection. 

It would help if you considered assessing these factors to check why your mortgage got rejected or, for a future application, why it may get rejected. 

Additionally, completing this sort of analysis may help you assess your own financial position adequately before proceeding with a mortgage application. 

1. Recency Of Late Payments

It is important to assess whether your late payment record on your credit file is an old one or a recent occurrence. 

Since lenders consider recent late payments – especially those made within one year – a sign of ongoing financial difficulties, your mortgage application will have a higher chance of getting declined. 

2. Pattern Of Late Payments

Another way late payments can affect your mortgage application is by how frequent or consistent they are. 

Lenders may feel that a frequent chain of late payments implies the fact that you do not manage your finances well, thus deeming you ineligible for the mortgage. 

3. Severity Of Late Payments

The severity of your late payments can also affect your mortgage applications. 

For instance, if you miss a few small payments at times, the lenders may not think this to be a huge issue when considering giving you a mortgage. 

However, severe cases of arrears, defaults, and missed payments may lead to your mortgage getting declined. 

What To Do After Your Mortgage Declined Due To Late Payment? 

First, you should understand that just because one mortgage lender has declined your application, it doesn’t mean you will never get a mortgage. 

Your late payment record may have fallen short of this lender’s requirements, so your application got declined.

If the severity of your late payments is not serious (in another lender’s eyes) and you have justified reasons for the same, you can approach alternative lenders who may understand your situation.

Importantly, we always recommend understanding your credit profile initially, be that yourself or through the use of an experienced mortgage broker, to best prevent a mortgage decline upfront, as this should best ensure understanding of the lender’s late payment criteria.  

What Are The Consequences Of Mortgage Declination? 

1. Financial Consequences

You might have to face several financial consequences if your mortgage is declined. For instance, you may lose all any money that you have spent on your valuation, and mortgage application processing for the application made. 

Further, when you choose to go ahead with the reapplication with a different lender, you may have to pay these fees all over again. 

2. Reduced Credit Score/Profile

Soft vs Hard Credit Checks

If lenders reject your mortgage application, this, in turn, could affect your credit score. 

Further, whenever you apply for a full mortgage application, your potential lender will perform a credit check – popularly known as a hard inquiry

If there are multiple hard inquiries on your report within a short span of time, it will often reflect badly on your credit report – thus resulting in a reduced credit score and profile. 

When completing a decision in principle before a full mortgage application is submitted, it is best practice to try and understand if this is a hard inquiry or soft enquiry against your credit file, as lenders differ on this at an agreement in principle stage. 

Once again, we must reiterate the importance of completing the hard work upfront and understanding your credit file and the lender’s late payment criteria who you are approaching so that it is best understood that your application will fit within their criteria. 

How To Best Prepare?

1. Assess Creditworthiness

One of the best ways to prevent mortgage declination in the future is to assess and hopefully improve your overall creditworthiness. 

You can kick start this process by reviewing your credit report for any errors or disputing inaccuracies that might bring down your credit scores and overall profile. 

Once you are sure there are none, you can take all the relevant measures to improve your creditworthiness. 

Here are a few suggestions to help you out in the process:

  • Demonstrate responsible financial behaviour 
  • Always pay bills and debt instalments on time
  • Reduce the ratio of your credit utilisation 
  • Avoid applying for new credit agreements continuously in short periods 
  • Always pay back the previously borrowed sums first
  • Have financial liquidity through savings and emergency funds 

2. Seek Alternative Options

If traditional lenders have declined your mortgage application or are likely to do so with the missed payments on your profile and you do not have the right means to obtain their approval, consider exploring alternative options as well. 

You can begin by reaching out to specialist lenders who have ample experience in working with individuals who possess a bad credit history

Such lenders are more flexible with their eligibility criteria for approving mortgages, which is why people who have been rejected elsewhere often approach them. 

However, to accommodate the increased risk, such lenders will often charge higher rates and fees than traditional lenders and want a higher amount as a deposit.

If you seek alternative options, it is important to carefully assess all the agreement aspects. Make sure to read all the terms and conditions, and only then agree to borrow a mortgage from such alternative means.  

3. Consult A Professional 

It can be frustrating to deal with the issue of mortgage declination, which is why you should consult a professional. 

Mortgage Advisor

A good mortgage advisor can provide adequate feedback and resources to assess the underlying issues that led to your rejection and, as we keep reiterating throughout this blog, avoid any problems upfront. 

As a result, in theory, you should be able to fix your problems easily and get your mortgage approved. 

While every mortgage advisor works with a different approach, all professionals usually review your financial situation, assess the issues, and then guide you through the application process.

Importantly, they understand lenders’ criteria, so they should be able to match your credit profile with the chosen lenders’ criteria. 

A good mortgage advisor will also help you map out your preferences accurately and then help you apply to lenders that specifically cater to your demands. 

While this may mean extra expenses, consulting such professionals should increase the chances of your mortgage application getting approved significantly. So it could be money well spent in the long run. 


1. How long do I have to wait to apply again if my mortgage is declined? 

You do not need to adhere to any mandatory waiting period while reapplying for a mortgage, and you can apply for it again once you have fixed your issues or consulted a lender in which you should meet their criteria. 

However, it is advised not to reapply too frequently to avoid frequent hard credit checks without the appropriate research that the lender should approve your application. 

2. How far do mortgage lenders check for missed payments?

In most cases, mortgage lenders check your credit report for missed payments back 6 years.

While old financial issues might not be a huge problem for most lenders, recent missed payments (6 to 12 months back) can lower your mortgage approval chances. 

3. Are all types of late payments treated equally by mortgage lenders?

No, not all types of late payments are treated equally by mortgage lenders. For instance, in most cases, your history of late payments for secured debts like mortgages will be viewed way more critically than those made on unsecured debts. 

Similarly, isolated late payments will not be considered as bad as frequent late payments across multiple accounts by potential future mortgage lenders. 


The whole process of applying for mortgages in the UK is not easy to begin with. And when on top of that, you have to deal with issues like mortgage applications getting rejected, it is understandable to feel hopeless at times.

However, it is important to stay patient while facing such problems. While it may seem very tempting to reapply for the mortgage quickly, you should never proceed with the process in haste. 

It would help if you reapplied only after you are confident that you have solved the underlying issue that caused the declination in the first place. 

Now that you know all about the various reasons why your mortgage application must have been declined, we hope you will be able to take the necessary steps to fix the issues. You can also reach out to professionals for help with the application process.

To reiterate one last time, please do the required work at the front end of the mortgage application process, such as understanding your credit profile and different lenders’ criteria, so any potential declination is avoided before you have applied.

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.

Mortgage & Protection Advisor | 03337892035

I am CeMAP (Certificate in Mortgage Advice and Practice) qualified mortgage adviser with a strong background in Finance. I specialise in providing expert advice on a range of mortgage products, including first-time buyers, remortgages, buy-to-let mortgages and bad credit mortgages.

CeMAP & CERER Qualified Mortgage Adviser

I am CeMAP & CERER qualified mortgage adviser and have helped a number of clients realise their dreams when they thought it would not be possible. I’m skilled at getting mortgages sorted for people with a history of missed payments, CCJs, defaults, debt management programmes, IVAs and bankruptcies.

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