First Time Buyer Mortgage Bad Credit History
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First Time Buyer Mortgage Bad Credit History
Can you buy a house with bad credit as a First Time Buyer?
It’s certainly possible to purchase a property as a First Time Buyer with less than perfect credit history. We have access to lenders who could consider a variety of adverse credit events. They could include defaults, unsecured arrears, County Court Judgments (CCJs) and more.
Can I get a mortgage as a First Time Buyer if I have a CCJ, an IVA, a default, a bankruptcy or payday loans?
You could. It would of course depend on your overall circumstances. Some lenders could accept these events in isolation – or possibly even in conjunction with one another.
Typically a bankruptcy is the most serious and would need to have been discharged for a period of time before a mortgage could be considered. With payday loans, some lenders would want to see that a client hasn’t taken any payday loans for a period of time prior to applying for the application.
CCJs and defaults could be acceptable to various lenders – either satisfied, where you’ve paid them off, or unsatisfied where they’re still outstanding.
Should the applicant’s credit score be low due to adverse events like CCJs and defaults, we could place them with a lender that focuses on credit conduct rather than the credit score itself.
Do First Time Buyers need a credit score? Can I get a mortgage if my credit score is very poor?
Everyone needs a credit score, in that a lender needs to access their credit file.
First Time Buyers often have a limited history of credit being repaid, especially if they haven’t had any credit cards or loans previously. We could look for lenders that are more lenient towards clients that have not necessarily adverse credit, but a lack of credit history.
What is the right home loan for a First Time Buyer with bad credit?
The most suitable home loans will depend on the client’s individual circumstances, which could vary from person to person. I wouldn’t say there’s a single right home loan, just the right one for yourself.
How much deposit will I need and how much can I borrow with bad credit?
This depends on your overall circumstances. Other factors could influence the level of deposit required against the value of the property. Typically, someone with a less than perfect credit history might be expected to acquire a larger deposit compared to someone with an impeccable credit record.
That said, we do have access to a wide range of lenders. We might be able to secure a mortgage with minimal deposit, even with bad credit, subject to a lender’s criteria.
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What’s the process of applying for a mortgage with bad credit as a First Time Buyer?
The process is more or less the same, with perhaps some additional research to establish the most suitable lender, and an in-depth look into overall credit conduct.
We might ask for a copy of your credit file in advance, to see the adverse events listed and advise accordingly. If you are concerned about your credit impacting your ability to obtain a mortgage, just get in touch with us. Let us know where you stand, and we could guide you through the process and take away the stress where possible.
What steps can I take to improve my chances of getting a mortgage with bad credit as a First Time Buyer?
One tip would be to consider taking out a credit builder cash card. You top up a cash card to pay for everyday items without actually taking out credit. These could have a positive impact on your credit file over time.
More importantly, satisfy any unsecured arrears. If you are behind on any loan repayments or credit cards, get those cleared. Satisfying CCJs or defaults will have an immediate and long-term impact on your ability to obtain credit in the future.
Ensuring you’re registered on the electoral roll could also have a positive impact on your credit score, even in the short term.
How can a mortgage broker help First Time Buyers with bad credit?
For any First Time Buyer, I’d always suggest using a good mortgage broker. When it’s coupled with possible adverse credit, it is paramount to receive advice.
We could guide you through the whole process, taking some of the guesswork and trial and error out of your hands. We’ll support you from the initial call all the way to collecting the keys to your first home.
Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £99 to £549, and this will be discussed and agreed with you at the earliest opportunity.
Asset Harbour Mortgage & Protection Ltd trading as Asset Harbour Mortgage & Protection are an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.