Property Blog: How a natter could cost you your mortgage

Published: 19/06/2014

There are now more mobile phones than people in the UK so it’s safe to say we all love a good old chat. However miss a mobile phone payment and you could see it come back to haunt you when you try and take out a mortgage. Lynne McCaffrey, Head of Property, discusses:

“I don’t know about you but if I ever find myself without my mobile phone – whether I’ve forgotten it or the battery has died – I feel like one of my arms has been cut off! Our over-reliance on mobiles is staggering – from a good old fashion chat to a quick text, updating our social media status to shopping, checking the latest scores or finding out what the weather’s going to be like later, there is little our phones can’t do.

“But we’re not just running the risk of isolating ourselves from actual physical interaction; racking up a sizeable phone bill could impact on your ability to get a mortgage following the introduction of rigorous affordability tests by lenders.

“According to a survey by Ocean Finance 14 per cent of people with a mobile phone contract have been late with a payment or even missed one altogether. This number increases to 23 per cent for those aged 18 to 24, potential first time buyers.

“Even with all our free minutes, unlimited texts and shed loads of data, mobile phone bills can easily tot up. Many users are unaware of the call charges for 0845 numbers while others get a little too carried away when posting boastful pictures by the pool only to then be greeted with a phone bill which isn’t too far away from the cost of the holiday itself! And then there’s voting for your favourite act on one of the countless ‘talent’ shows. Support doesn’t come cheap, not on those tariffs.

“However mobile phones contracts are a form of unsecured credit so a late or missed payment can leave a stubborn blemish on your credit history and therefore affect your chances of taking out a loan, credit card or mortgage in the future.

“Getting a mortgage has never been an easy feat, and rightly so given the size of the loan. However since the latest changes from the Mortgage Market Review, lenders have turned up the focus on their mortgage magnifying glass and are going through an applicant’s finances with a fine tooth comb. A late payment will stick out like a sore thumb.”

Lynne McCaffrey is a licensed conveyancer with over 18 years experience. As Head of Property at Goldsmith Williams Lynne is responsible for the day to day running of the property department, which specialises in conveyancing, remortgage, buy to let and bridging.

Content correct at time of publication