First Time Buyer Mortgage Bad Credit History

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First Time Buyer Mortgage Bad Credit History

Luke Platt talks us through the mortgage process for First Time Buyers with a bad credit history.

Can I buy a house with bad credit as a First Time Buyer?

Yes, it is possible to buy a house with bad credit as a First Time Buyer. Speak to us and provide us with your credit report, so we can assess that adverse credit and see if it might be a stumbling block when it comes to buying a house.

We have access to lenders who can take a positive approach to bad credit. No one criteria fits all, so my recommendation would always be to reach out to a mortgage broker. We have access to all the different lenders and their various criteria around defaults, IVAs, bankruptcy and CCJs. We can certainly help First Time Buyers who have bad credit history.

Can I get a mortgage as a First Time Buyer if I have a CCJ, IVA, default, a bankruptcy or a payday loan?

Absolutely. With adverse criteria, it all depends on what’s shown on your personal credit report. So my first tip would be to send your credit report over to the mortgage broker, and we will then go through your credit file meticulously, looking at dates, the value of the adverse credit, whether it’s been satisfied, and then run the details against the criteria of all the different adverse lenders available.

Based on that, we may have a lender for you. If not, a good broker would give you tips on how to get yourself ready for a lender to look at your mortgage application.

Do First Time Buyers need a credit score? Can I get a mortgage if my credit score is very poor?

It is possible to get a mortgage, within reason. It’s good to make sure that you are on the electoral roll, as this helps, along with managing credit sensibly and always ensuring you pay off your debts on time.

If lenders still decline, it’s likely that they need you to have more time since the credit issue. A broker would tell you to review it again in a 3–6-month period whilst building up your score.

Make sure that your debts and liabilities are paid off on time, and then come back once you feel you’re ready to go forward.

What is the most suitable home loan for a First Time Buyer with bad credit?

It all comes down to the client’s preferences, and how they want to manage their finances going forward. A broker will obviously work with the client to make sure that the repayments are affordable, and that they won’t be living beyond their means.

There’s no single right loan for anybody, it’s all down to individual needs, preferences and circumstances. That would all be discussed with us as your mortgage broker before making any application to a lender.

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We are award-winning brokers who will navigate the complex mortgage marketplace for you, looking at everything from your deposit to how long you want the mortgage for and how much you can realistically afford to repay.

How much deposit will I need? How much can I borrow if I have bad credit?

With bad credit, you may require a bigger deposit, perhaps 10% or 15% of the purchase price. That would vary with each lender. It’s right to check with a broker regarding what level of deposit would be needed.

What’s the process of applying for a mortgage with bad credit as a First Time Buyer?

There may potentially be extra checks. Generally with adverse credit, lenders have a set appetite for risk. They might decide to ask for an additional pay slip or bank statement. They might want to see if a certain debt has been paid off.

There can be a little more processing time for a mortgage with bad credit as a First Time Buyer. But a mortgage broker will talk to you through these steps and assist you all the way through the process.

What steps can I take to improve my chances of getting a mortgage with bad credit as a First Time Buyer?

A key tip would be not to take out any further lines of credit. If you can afford to, clear off any debt you have in the background and make all payments to any outstanding creditors on time.

A mortgage is a long-term debt, so lenders want to see that you have a healthy relationship towards debt by paying on time and in full. It’s all about presenting yourself as somebody responsible, who is able to manage the monthly repayments on a mortgage.

What else do we need to know about getting a First Time Buyer mortgage with bad credit?

A mortgage broker can help in lots of ways. We look at the mortgage case for you and discuss your application directly with an underwriter – you can’t do that by going directly to the lender yourself.

We also have extensive knowledge of lenders’ risk appetites – such as what they will accept in terms of adverse credit and what they won’t.

Also, it’s well worth having somebody there to walk you through the process and support you through what can be a challenging journey. A good broker is worth their weight in gold.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.