Late with mortgage repayments

Hi,

Due to the fact that my wife took 6 months unpaid leave to extend her maternity leave we have unfortunately been late with the last few mortgage repayments as a result of the drop in income.

Will this have a negative effect on our credit rating? Is it seen on the same footing as missing a paymeny completely?

Thanks.

From the ICB site [broken link removed]:

2. How do lenders know about my previous loans?

Most lenders in Ireland send information about borrowers and their repayments to a central agency, the Irish Credit Bureau (ICB). The ICB holds information about borrowers and their loans for 5 years after the loan is closed. This information is held in an individual credit ‘report’ that is kept by the ICB about each borrower.

Your credit report includes:

• your name, date of birth, address(es) used by you in relation to financial transactions

• the names of lenders and account numbers of loans you currently hold, or that were active within the last five years;

• repayments made or missed for each month on each loan;

• the failure to clear off any loan;

• loans that were settled for less than you owed; and

• legal actions your lender took against you

So, the ICB reflects a full picture of your credit history, good and/or bad.

5. What information do lenders send to the ICB?

Lenders send information about borrowers who have mortgages, car loans, personal loans, leasing/hire-purchase agreements and credit cards.


So even though they only refer to repayments made or missed, I guess it depends on how the lender defines a 'missed' payment, i.e. is it a payment not made or a payment made late (how late?) or both, and I suspect that this could vary between lenders. If your record has more evidence of 'good' repayment habits than 'bad', then I susptect that a few late payments will not make a huge difference in the longer term.

I note that you have posted a similar query here.

Is there any way you could reschedule certain payments/bills so that you do not miss regular payments? Have you got a plan for dealing with this situation longer term? You may want to contact MABS for free advice if you feel you need additional assistance in tackling the problem.

Thanks for getting back to me. My wife returns to work tomorrow so I hope this wont be an issue again with the extra income.

Certainly with better planning it would not and should not have happened.



Thanks again,
Mickaxe

Glad to hear it will be sorted soon.

A customer service guy in BOI told me that a payment that is missed by an account holder is registered to the ICB after 1 month, so if you are due to pay xxx on the 30th of the month and you dont pay it within the next 28 days after the 30th, the bank send the details of the unpaid amount to the ICB.

If you know that this is going to be a problem go and talk to the lender before it happens. There is no point in worrying about it when the damage is done. They will allow you to skip a few payments if they know it is temporary.

woods said:

If you know that this is going to be a problem go and talk to the lender before it happens. There is no point in worrying about it when the damage is done. They will allow you to skip a few payments if they know it is temporary.

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Agreed,

I faced problems with mortgage replayment before xmas due to partners unexpected lay off/redundancy - rang the PTSB and they arranged a 3 month payment holiday to take immediate effect which have us breathing space over xmas etc.

Admittidly it did cost a few euro extra from now on per month (approx 10 euro I think) but well worth it and doesnt affect credit rating etc.

Don't worry about the arrears. Most banks/building societies automatically issue arrears letters but don't really pay much attention to them for about 3 months. I would suggest that you make some separate payments in to your mortgage in addition to your monthly repayment over the next few months even to cover the mortgage protection payment. Absolutely no harm in you writing a short note to the bank to explain the arrears. If the arrears are a problem write to the bank and ask them to capitalise these.

I think woods' advice above about contacting the lender sooner rather than later is better than Odea's about ignoring any arrears or missed payments. Letting things like this slide is a very bad idea.

Clubman. Where did I say that the borrower should ignore arrears or missed payments? Did I not say "absolutely no harm in writing a short note to the bank to explain the arrears". In fact did I not suggest twice in my four line post that the borrower should write to the lender? Also was my posting not similar to Wood's advice in many ways.
Having personally dealt with mortgage arrears while working in a financial institution our procedure was to issue arrears letters immediately but not follow up until 3 months had passed. Where a borrower was making an effort to clear the outstanding arrears no further contact was made other than the computer generated arrears letters.
Mickaxe seems to have fallen in to arrears while his wife was not working due to maternity leave. The lender will take in to consideration, previous history, value of house viz a vis amount outstanding on loan. I am sure the local branch manager will know his customer.

Odea said:

Clubman. Where did I say that the borrower should ignore arrears or missed payments?

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That's what I took from this comment:

Odea said:

Don't worry about the arrears. Most banks/building societies automatically issue arrears letters but don't really pay much attention to them for about 3 months.

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Apologies if I was mistaken in this analysis.

Odea said:

I would suggest that you make some separate payments in to your mortgage in addition to your monthly repayment over the next few months even to cover the mortgage protection payment. Absolutely no harm in you writing a short note to the bank to explain the arrears.

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Thanks for the advice - Stupid question who should I write to? My branch manager, the person I usually deal with re loans/queries etc or someone at BOI mortgages centrally?

Also, I don't have mortgage protection on my mortgage - I was told that I could not take out a protection policy when I went back to the bank as they said it could only be taken out at the same time as the mortgage application was made. I have considered taking out a simila policy with an insurance co or putting a sum of money equal to the premium into savings but have done neither, what would you suggest?

Thanks.

mickaxe said:

Thanks for the advice - Stupid question who should I write to? My branch manager, the person I usually deal with re loans/queries etc or someone at BOI mortgages centrally?

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Just write to the branch which handles your loan account and quote your customer/account number(s).

Also, I don't have mortgage protection on my mortgage

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Presumably you mean mortgage payment protection as opposed to mortgage protection life assurance since the latter is normally mandatory on owner occupier loans. See this thread.

- I was told that I could not take out a protection policy when I went back to the bank as they said it could only be taken out at the same time as the mortgage application was made. I have considered taking out a simila policy with an insurance co or putting a sum of money equal to the premium into savings but have done neither, what would you suggest?

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Do you really need such cover? A lot of those policies are poor value for money due to the limited circumstances and periods of time in which they will actually pay out. Are you working in an industry with a high risk of job loss? What are the chances of you not getting any paid employment that would allow you to pay the mortgage? Don't forget that if you do become unemployed then you may be entitled to welfare payments to tide you over until you find new work and, if necessary, your lender may facilitate a deferral or reduction in repayments if you approach them and explain matters.

Thanks Clubman.

Job is not 100% safe at the moment but I am trying to put some money away to cover the repayments in the event of being made redundant. As we (just) survived on one salary for a number of months we are aiming to avoid dipping into my wifes salary now she is in employment again and allow it to build up. This will give us some peace of mind.

Mickaxe.