Tougher affordability rules are leaving a little room for mistakes when applying for a mortgage and a little thing as an unpaid phone bill can stand between you and your dream home.
Following the Mortgage Market review, introduced in April last year, lenders are required to run thorough affordability checks, which include the review of mobile phone contracts.
Gareth Shilton, a spokesman for loan, mortgage and credit card provider Ocean Finance, explains:
“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 iss crucial to get ‘mortgage fit’ or you may risk losing a house you have set your heart on.”
New research from Ocean Finance found that almost four million people have delayed or missed their mobile phone payments.
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.
The biggest number of people struggling with their phone bills is among those aged 18 to 24. Almost a quarter of consumers in that age group admitted to have missed or delayed payments.
Londoners top the list of the biggest late-payment culprits with over a quarter of mobile users in the capital having difficulties with their phone bills.
Gareth Shilton advises:
“If you find yourself in difficulties that are affecting your mobile phone payments you could speak to your network provider and explain your situation. It’s very important to find solution before it’s too late. Your network provider might be able to offer you a cheaper tariff or allow you to make smaller payments. That can help you to get back on track with your mobile bills. You need to make sure you are able to prove lenders that you can manage your money.”
