Financial Director secures £450,000 mortgage despite previous mortgage arrears

Trinity Financial helped a financial director secure a £450,000 repayment mortgage after several lenders declined her application because of missed mortgage payments registered following a difficult separation.

The mortgage challenge

Our client had separated from her former partner approximately 18 months earlier. As their existing mortgage was still subject to an early repayment charge, she moved back in with her parents while her former partner remained in the property.

They had agreed that he would cover the mortgage payments and household running costs. However, he subsequently stopped paying the mortgage, despite continuing to pay the other household bills.

The resulting missed payments and arrears were recorded on our client’s credit report, even though she was no longer living at the property. This created a significant problem when she later wanted to purchase a home independently.

The previous property was eventually sold, the outstanding mortgage was repaid, and the former couple went their separate ways.

Why did the client contact Trinity Financial?

Our client approached Trinity Financial after finding us online. She had a good income and could comfortably afford the new mortgage, but the adverse credit history meant that other mortgage lenders were declining her applications.

She wanted to purchase a property valued at £650,000 and required a £450,000 mortgage, equivalent to approximately 69% loan-to-value.

The main challenge was finding a lender willing to consider the circumstances behind the previous mortgage arrears rather than relying solely on an automated credit score.

How did Trinity Financial help?

Our mortgage broker reviewed the client’s credit report and established that the arrears had been registered with a large building society, the lender that had provided the mortgage on the previous property.

As the lender already held the history of the previous account, we provided a detailed explanation of the separation, the payment arrangement with the former partner and the events that led to the mortgage falling into arrears.

They were prepared to assess the application individually and accepted the explanation behind the missed payments. Other lenders had declined the case, but the society agreed to provide the mortgage and issued a formal mortgage offer.

What mortgage did the client secure?

The client secured a £450,000 capital repayment mortgage to purchase a £650,000 property.

The mortgage was arranged on an early repayment charge-free tracker rate initially priced at 4.38%. The rate was 0.63% above the Bank of England Base Rate, which was 3.75% when the mortgage was arranged.

After the tracker period, the mortgage moves to the lender’s standard variable rate with a temporary discount of 0.75% until 31 October 2031. It then moves onto the lender’s standard variable rate for the remainder of the mortgage term unless you do a product transfer or remortgage.

Choosing a mortgage without early repayment charges provided the client with additional flexibility should she decide to repay the mortgage, remortgage or switch products during the initial period.

The result

Despite having sufficient income and an affordable mortgage request, the client’s previous mortgage arrears meant that most lenders were unwilling to proceed.

By understanding the background to the adverse credit history and presenting the case to a lender familiar with the previous mortgage account, Trinity Financial secured the £450,000 mortgage offer the client needed to move forward with her property purchase.

This case demonstrates that missed mortgage payments do not always prevent someone from obtaining another mortgage. The circumstances behind the arrears, how recently they occurred, whether the debt has been repaid and the lender’s underwriting approach can all make a significant difference.

Mortgage rates and lending criteria can change at short notice. Your property may be repossessed if you do not keep up repayments on your mortgage.

If you do move out of your former home and you have joint bills, it is important to check your credit report if you do not have access to the bank account. This way you can monitor the finances and try to rectify any issues. 

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage.