Will a bigger deposit help me get approved if I have late payments?
A lender willing to grant late payment mortgages may well demand a much higher deposit in return. An applicant with a clean credit history i.e. no late payments might be able to get a mortgage with a deposit between 5-10% of the property price, depending on their other circ*mstances. So for example, if you wanted to buy a house with a market value of £200,000 and you had a clean credit history and impeccable affordability, you might be able to secure that mortgage and home with £10,000 (5%) or £20,000 (10%).
In contrast, someone with affordability issues may struggle to find a lender willing to approve a mortgage with a small deposit because it opens them up for a greater loss if that person doesn’t repay the loan. A 15-25% deposit might be required under those circ*mstances. For that same £200,000 house, you might need £30,000 (15%) or as much as £50,000 (25%).
So ideally, if you’re looking for a mortgage and have a fairly small deposit of around 5-10%, aim to have a clean record of no missed payments for anything up to two years previously. If you’re not quite there yet, start making improvements to your credit report by keeping on top of your payments, making sure you’ve signed up to the electoral system and applying for free credit boosting services like Experian Boost.
