First Time Buyer Mortgage Bad Credit History
- We want to take the stress away from the buying process and be part of one of the happiest moments that life can offer
- Over 50 years of combined experience
- Access to the whole mortgage market
What's On This Page?
Get In Touch
Home » First Time Buyers » First Time Buyer Mortgage Bad Credit History
First Time Buyer Mortgage Bad Credit History
Can you buy a house with bad credit as a First Time Buyer?
Yes, you can still get a mortgage if you’ve got bad credit. Obviously, it depends on the type and size. I would recommend going to a mortgage broker if you do have bad credit, because if you go direct, most high street lenders have a low tolerance for this. It could be that you don’t fall within their criteria.
If you go to a mortgage broker with a copy of your credit report, they will understand what type of bad credit is on file and they have access to the whole market – if they are independent.
Some mortgage brokers are tied, which means they only have access to a panel of lenders. We will research which lenders would be able to help you as a First Time Buyer with bad credit.
Can I get a mortgage as a First Time Buyer if I have a CCJ, IVA or default, with a bankruptcy or payday loans?
A lot of it depends on how recent the bad credit was – especially IVAs and bankruptcies. Again, the best place to start is with a mortgage broker.
We’ll ask you questions about what happened with that situation, how long ago it was, whether the debts are paid off or if some are still outstanding, and your current situation. Obviously, if we can get you a mortgage, we need to be sure you can cover the payments on that and it’s not going to put you under financial pressure.
Potentially, though, it’s a yes to all of those types of bad credit, depending on individual circumstances and how long ago the event took place.
Do First Time Buyers need a credit score? Can I get a mortgage if my credit score is very poor?
The good news is there are lenders that don’t actually go by credit score. They just look at what’s on your credit report. Your Experian credit score, for example, goes up to 999 but yours might be low because you haven’t had a lot of credit in the past.
Some lenders don’t use credit score to determine whether or not you can get that mortgage. Instead they’ll actually look at your credit file. They’ll see what credit you’ve got, how you’ve conducted yourself in paying on time, and they’ll piece that together with your whole case – whether you are employed, self-employed, you have children, your income and the deposit you’ve got. They will take an overview of the case rather than just going by the credit score.
What is the best home loan for a First Time Buyer with bad credit?
This is an unusual question – I think it’s asking about the best lender to approach for a First Time Buyer with bad credit.
On that basis, it depends on how bad the credit is. Is it just a late payment or are there defaults and CCJs? How recent is the bad credit? Is it something that’s been on your file for two or three years, or longer?
Some high street lenders do have an appetite for a small amount of bad credit – such as Barclays, Halifax and Santander for example [correct at the time of recording in January 2025].
If the bad credit is quite recent or there’s quite a lot, or it’s something more serious such as a CCJ or a default, we’d be looking at more specialist lenders. Vida and Pepper are examples of specialist lenders that have a higher appetite for risk.
Speak To an Expert
How much deposit will I need and how much can I borrow if I have bad credit?
Again, it does depend on the lender and your situation. With a typical bad credit case, lenders go anywhere from 85% upwards on the Loan to Value, but it would depend on how bad the credit is.
For something quite recent and serious, such as a CCJ for over £2,000, that would cut quite a few lenders out – unless you can find a higher deposit. It depends on that individual situation. If you have had late or missed payments, CCJs or defaults, depending on how recent they are, certain lenders can still go up to 95% Loan to Value.
The best thing to do is sit down with a mortgage broker. We assess your credit history, and then find a lender that fits that with you.
What’s the process of applying for a mortgage with bad credit as a First Time Buyer?
The process is exactly the same as for anyone else. If you’re using a mortgage broker, you would approach your broker and explain what you’re looking for. What deposit do you have? Have you started looking at properties or made any offers?
We’ll sit down and go through a fact-find to establish different things about your situation – terms of your employment, where you’re living, how long you’ve lived there and whether you are a UK national or if you have a visa.
From there we will look at a copy of your credit report. Some brokers have software to access the credit report for you. We then do affordability checks and come back with a suitable lender that matches your criteria.
This is the same process whether you had bad credit, good credit, you’re a First Time Buyer, homeowner or remortgager. It’s the same regardless of your situation.
What steps can I take to improve my chances of getting a mortgage with bad credit as a First Time Buyer?
Try and keep on top of any payments going forward. If you’ve previously struggled to keep up, I would definitely suggest doing a budget planner and marking out the days in your calendar where payments are due.
Sometimes people forget to transfer money from one bank account to another, and they’ve got direct debits coming out. It’s a genuine mistake, but it’s avoidable. I suggest making sure you have things on direct debits or standing order. If you’re making a manual payment and you forget one day, it could cause a problem on your credit file.
Another thing I see is people with old CCJs and defaults that they’ve left unsatisfied. They’ve not paid the debt off, even though they are aware of it. A big chunk of lenders wouldn’t consider you with an unsatisfied debt. I would definitely suggest that if you can, you pay those debts down.
It’s all about money management, really. You could sign up to a credit system such as Check My File and keep on top of that every month, checking that your credit isn’t declining and your payments are being made on time.
Make sure you’re registered on the voters’ roll. Also, try not to apply for too much finance and because all of this goes onto your credit report. If you’ve got credit cards, try not to take them up to the limit as that will reduce your credit score. There are lots of things people can do to improve their credit file.
What else do we need to know about mortgages for First Time Buyers with bad credit?
We’ve covered quite a lot, but an important thing is that whatever mortgage broker you go to, you feel comfortable with them. You will need to feel relaxed in talking with them about that bad credit, and be happy to build an open and honest relationship.
Your mortgage broker will be supplying information to the lender on your behalf, so they need to have the full picture. Financial advice doesn’t stop once you get a mortgage offer. It’s an ongoing thing.
Your mortgage is going to be your biggest debt, and there for the next 25 to 30 years – or even longer. When you’re coming to the end of your product term, your broker will be there to help you find your remortgage deal. That relationship with your broker is very, very important.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
What Our Clients Say
Useful Links
- First Time Buyers
- Bad Credit Mortgage
- Remortgage With An IVA
- Mortgage With An IVA