First time buyer with a low credit score (you can still get a mortgage with DRO, IVA, CCJ or DMP credit issues)

How to get your first mortgage if you have a low credit score

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First Time Buyer with Low Credit Score

If your credit history contains defaults, CCJs, missed or late payments, or even instances of bankruptcy, you may think it’s going to be impossible to get a mortgage. But don’t give up hope!

For every high street bank that’s likely to turn you down, there’s a specialist lender with relaxed eligibility criteria who may be willing to take a view on your case. You’ll just need to work with a mortgage broker who has experience in bad credit, and who knows exactly where to go for the best deals and the most competitive terms.

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 a low credit score affect your chances of getting a mortgage?

If you borrow money from a lender and have difficulty paying it back on time, this will have a negative impact on your credit score and may make it much harder to borrow again in future. In turn, having a low credit score means that the information held on your credit file will be viewed negatively by lenders. This will affect your chances of securing any sort of finance, including a mortgage.

Other factors that can adversely impact your credit rating include:

  • County Court Judgements (CCJs)
  • Bankruptcy
  • Defaults on your credit file
  • Too many hard searches on your credit file
  • An Individual Voluntary Arrangement (IVA)
  • Debt Management Plan (DMP)
  • Debt Relief Order (DRO)

Even those who have not built up their credit history yet can be considered as having bad credit. For example, if you’re a young adult who is new to finance, or someone who has just moved to the UK from overseas, lenders will have no record of your ability to manage your money and may be reluctant to enter into an agreement with you.

Whilst having bad credit can make it more difficult to get a mortgage with some of the more well-known banks and High Street lenders, different companies have different eligibility criteria, so it may still be possible to find a lender that will accept your mortgage application.

Why use a mortgage broker?

You won’t know what your options are until you speak to someone who can look at your circumstances objectively and advise on the best way forward.

The mortgage brokers here at CLS Money have plenty of experience in sourcing bad credit mortgages for first time buyers. And because they work with the whole of the market, they can often access deals that have been specifically designed for customers with a lower-than-average credit score.

We're your exclusive mortgage expert for every eventuality

We offer professional advice for borrowers with problems other than credit issues. They might have all kinds of other debts or no debt at all, we're here to find specialist lenders for every eventuality.

So, whether it's getting a mortgage that requires specialist finance or tailored advice for a failed business, we'll organise the loans other lenders shy away from. When it comes to finding suitable lenders to lower the repayments on your mortgage, or locating the most suitable lenders for someone with only an approximate annual income – we've got everyone covered.

If you need more information on any of the following or anything else, our team of advisors is waiting for your call.

  • Applying for a mortgage
  • Mortgage advice for self employed, company directors and professionals
  • Specialist lenders for credit issues
  • Bad credit mortgages
  • Dealing with poor credit history
  • Debt Relief Order DRO mortgages
  • Mortgage approval for those with credit card debt
  • Building your lender criteria
  • Tracking down the right mortgage lender for higher risk applicants
  • Loan to value mortgages

Contact us today to discuss everything in greater detail and get free, no-obligation quotes from mortgage providers who are likely to accept your application.

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Gemma May

Operations Director

Gemma May

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