Mortgage Declined Due to Late Payments? Here’s What to Do Next.

While a history of paying bills after their due date might give certain lenders cold feet, there are still plenty of options available to get the mortgage you need.

So, if you’ve recently had a mortgage declined due to late payments, take a breath. This guide is all about what to do next, how we’ll help you to turn things around, and why your dream home is still within reach.

Can You Get a Mortgage with Late Payments?

Yes, it’s perfectly possible. Late payments are regarded as one of the more minor forms of adverse credit, and it’s not uncommon for many people to have had a few such blemishes on their credit record at some point. Life happens. Most mortgage lenders know and appreciate this.  

If your late payments were isolated, happened a while ago and were for relatively small amounts, lenders - particularly those who specialise in helping people with adverse credit history - will still consider your mortgage application. 

However, if the late payments are recent (within the last 12 months), especially on secured debts like a previous mortgage or car finance, the smarter move is to work with a specialist mortgage broker to make sure you find the right lender rather than risk another rejection.

How Do You Find Out if You Have Any?

The first step is to grab a copy of your credit report. You can request one for free from each of the main Credit Reference Agencies (CRAs): Experian, Equifax, and TransUnion. 

Alternatively, you can use a credit report service like Checkmyfile*, which provides a combined report and score based on information from all three CRAs.

Your report will show any late payments, how long ago they were, and whether you’ve squared things up since. It’s also a good chance for you to spot any surprises—or errors—and ask for your details to be updated by the relevant CRA before applying again.

*When you click through to our affiliate links, we may earn a small commission. We only recommend sites we trust and believe in. 

How Will They Affect a Mortgage Application?

Late payments can lower your credit score, which in turn will make lenders feel a bit twitchy when they’re reviewing your mortgage application. But not all late payments are treated equally and their impact will vary depending on: 

• When the late payment happened. The older, the better. 

• How many late payments are on your record. Multiple late payments, particularly if they’re recent, will raise concerns.

• What they were for. Was it for secured debt (mortgage) or unsecured debt (credit card, etc.). 

Lenders need to feel confident about the level of risk involved when they lend money to someone. While one or two late payments from years ago might not cause concern, a history of multiple and/or recent ones could lead mainstream lenders to reject your application.

Specialist lenders, however, could still approve your mortgage, but it might mean slightly higher interest rates and deposit requirements.

Which Lenders Can Help You Get a Mortgage?

The reality is that most, if not all, high-street lenders tend to see things in black and white when processing mortgage applications, particularly where adverse credit is concerned. Their systems are quick to decline if something doesn’t tick the right boxes, even for minor issues like late payments. 

Specialist lenders? They’re much more prepared to consider the story behind the credit score and look at the whole picture. But, with little or no presence on the high street, you’ll need some help from a mortgage broker who’s travelled down this road many times before and knows how to find the right one. 

This is where we come in! 

Through our sister brand, Haysto, we’ve made mortgages possible for thousands of people with a whole range of complex mortgage needs, including those with this type of adverse credit. 

We’ve done this by building close working relationships with many of the U.K.’s most respected specialist mortgage lenders, such as West Brom Building Society, Kensington Mortgages, Aldermore, Bluestone Mortgages and West One Loans. 

All of the above lenders (and several others) will happily consider applicants who have a history of late payments. Rather than adopt a ‘computer says no’ approach, they review applications on a case-by-case basis, meaning they’ll be looked at by a real person, who’ll take into account more than just your credit report. 

How to Increase Your Chances!

There are several proactive steps you can take to give yourself a better opportunity of getting the mortgage approval you need with late payments on your credit file. 

Here’s how to take charge of your mortgage journey:

• Get a copy of your credit report and make sure it’s accurate

• Fix any errors and stay on top of all your regular outgoings moving forward

• Register on the electoral roll—it helps lenders confirm your current address

• Pay down any other outstanding debts where you can

• Hold off on any other new credit applications for now

• Save up for a bigger deposit—it gives you more lender options

• Work with a broker who gets how lenders tick when it comes to this type of adverse credit issue

This isn’t about being perfect. It’s about showing progress and giving lenders more confidence in you as an applicant that you’re on the right path.

Acceptable Reasons for Late Payments

This may not change any mainstream lender’s stance, but several specialist lenders could be willing to give some more leeway if you can explain what, and why, the late payment happened. 

Here are a few legitimate reasons that could make sense:

• A gap in income (like job loss or illness)

• A family emergency or bereavement

• Admin errors from your bank or provider

• Major life events (divorce, relocation, etc.)

If any of these apply, it’s worth putting together a short explanation. Think of it as an opportunity to provide context that helps a lender understand the story behind the credit score. 

Late Payments Vs. Missed Payments

Being late for something means you got there in the end - but you were late, whereas missing something means you didn’t make it at all. The same reasoning applies to late payments - you made it, but not on the actual day it was due. 

If you made the payment within 30 days of the due date, it shouldn’t appear on your Credit Report. After 30 days and it will be recorded. 

A missed payment is when no payment has been made at all, at which point your account will fall into arrears for that amount. For this reason, missed payments are viewed more seriously than late payments and can escalate into a default if further payments are missed (usually no less than three).

How Long Do Late or Missed Payments Stay on Your Credit Report?

Both late and missed payments stay on your credit report for six years from the date they were recorded. However, their impact lessens over time, especially if your recent financial conduct has been strong.

How Soon Can You Re-Apply for a Mortgage?

If you've already been declined due to late payments, technically, you can re-apply whenever you like. But here’s the wiser move:

• Find out exactly why you were declined

• Review your credit report and fix anything that’s dragging your score down

• Work with a broker who can steer you to a lender that suits your situation

Apply again too soon without making changes, and you could face another ‘no’. It’s a much better idea to take a quick pause, make whatever repairs are needed, and come back stronger.