A missed phone payment could cost you your dream home

27th July 2015


Missed or late payments on your mobile phone could cost you your dream home, as lenders comb bank statements to carry out strict affordability checks.

Research by loan, mortgage and credit card provider Ocean Finance highlights that almost four million people have delayed or missed their mobile phone payments.

The new system, the Mortgage Market Review (MMR) which came into force in April 2014, ensures that lenders conduct a full affordability check on mortgage applicants. This may impact the amount people can borrow and the length of time that an application might take.

When asked about the reason for late payments or failure to pay, half of consumers blamed unexpectedly high bills. A further third of consumers said they delayed mobile phone payments because they prioritised other bills.

Those in the 18-to-24 age group are most likely to suffer problems with their mobile bills, with nearly a quarter admitting to delaying or missing payments.

Looking around the country, mobile phone users in London are biggest late-payment culprits, with over a quarter of them running into difficulties. This is followed by those from the North East, at 24%.

Gareth Shilton, a spokesman for Ocean, says: “Mobile phone contracts are a form of unsecured credit, and having as little as one late payment in the past three years can dramatically affect people’s chances of getting a mortgage.

“Lenders are now scrutinising every detail of an applicant’s finances, stress-testing their ability to manage a budget and withstand potential interest rate increases. If you plan to apply for credit, make sure you tidy-up your bank statement in advance. Put in place direct debits and set aside the money to pay them, and then cut back on unnecessary spending. It’s crucial to get ‘mortgage fit’ or you may risk losing a house you’ve set your heart on.”

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