How to get a mortgage as a first-time buyer with defaults
It’s true that securing a mortgage with defaults on your credit file can be tricky at times – especially if you’re looking to purchase your first ever property.
But it’s a myth that no mortgage providers are willing to lend to individuals with missed payments and closed accounts on their credit file.
There are a range of lenders out there who can help people in this position secure a competitive and sustainable home loan and grab the property of their dreams. The team here at CLS Money can introduce you to specialist companies that are more likely to take a view of your circumstances and offer a deal despite your poor credit history.
Things to consider as a first-time buyer
Lenders define a first-time buyer as someone purchasing a property who has never owned a home previously.
If you’re a first-time buyer, you might not fully understand the mortgage process, so it can be really helpful to speak to an expert to talk you through it. He or she will explain all the key terminology and help you work out how much your monthly repayments will be, as well as how much the mortgage will cost you over the course of your full term.
One key thing to ensure from the start is that you have all the right documents to hand. Any errors, inconsistencies or omissions from your paperwork could be a red flag to your lender and could put you in a poor position when it comes to being accepted for a mortgage.
As a first time buyer, you might not have a strong credit history. Chances are you’ve never had to pay back this kind of debt before. From the lender’s perspective, taking you on as a mortgage customer is a bit of a gamble because they have no examples of your reliability as a debtor. This is why it’s so important to use a mortgage broker when looking to apply for a first-time buyer mortgage. Their expertise will help you meet lender criteria, which in turn will give you a better chance of being accepted for a mortgage and securing your dream home.
How will defaults affect your chances of getting a mortgage?
Defaults occur when you miss multiple payments. Your credit provider will issue a warning to say that you have broken the credit agreement, and, if you do not settle the repayments in good time, they will proceed to close your account.
As you can imagine, defaulted credit accounts can severely affect your credit score – and this can seriously impact your chance to get a mortgage. In fact, it’s one of the most common reasons why mortgage applications are refused. Most mortgage applicants are typically judged solely on their credit reports to determine the risk of the loan. More flexible lenders will look deeper into each application to understand the bigger picture. These lenders consider how well you manage your current budget, and also where you've managed loan repayments well and haven't missed payments.
If you have a default on your credit file, mortgage lenders won’t be able to read an explanation as to why the payments were missed. The default merely serves as a warning for them and any other provider who is considering giving you credit.
It’s tricky enough to secure a mortgage when you’ve got defaults – but many people make things worse by sending multiple applications to High Street lenders who are unlikely to accept them. Each application leads to a credit check, and having many hard credit checks on your credit report can bring down your overall score, which will hinder your chances of getting a mortgage even further.
Before you approach any mortgage lender, be sure to speak with one of our specialist mortgage brokers. We have great connections with flexible lenders who often consider applications with defaults and take a broader view of our customers’ financial situations.
Why use a mortgage broker?
Finding the right mortgage is one thing – but putting together a winning application is arguably the most important part of the process!
Our mortgage brokers have decades of combined experience. We provide mortgage advice to help customers with defaults present a strong case to their preferred lenders. We’ll help you collect all the necessary documentation, and we’ll manage everything on your behalf, freeing up your time to focus on preparing for your big move. If you want to keep track of our progress, you can simply log in to our customer portal for real-time updates or get in touch with our team directly.
CLS Money work with specialist lenders for every situation
With the right lenders, they understand life isn't always black and white and not everyone who wants to own their own home has a clean credit file. A mortgage with a default is only one area that affects your credit rating and your chances of borrowing the money you need. However, adverse credit situations doesn't have to mean the end of a mortgage application.
As an expert mortgage broker, CLS achieves mortgage approval that many lenders would reject every day. We offer tailored advice for mortgage deals for borrowers with bad credit, unsatisfied defaults, low incomes, CCJs, and complicated financial commitments. There are several mortgage lenders for every eventuality, and we're here to find the best option for you and your situation.
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Whether you need bad credit lenders or any other type of mortgage application, there are more than a few mortgage providers already working with people just like you. As the exclusive mortgage expert you need, we provide the specialist finance advice to get you on the property ladder.