First Time Buyers with Bad Credit

Getting the keys to your own front door is a fantastic feeling at any time; getting them for the first time should be a time of great excitement and celebration. Of course, before you get to put the key in the door, there are several obstacles to overcome; not least the fact that you have to arrange a mortgage. So what do you need to do to make that happen? And what additional things might you have to do if you have a poor or non-existent credit rating?

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Author: Carl Shave - CEO and co-founder
Last updated: 30 May 2024

Can First Time Buyers get a mortgage with Bad Credit?

You might be in the position of having identified your perfect first home, but, when it comes to obtaining a mortgage, you end up hitting all sorts of obstacles thrown up by conventional mortgage providers because you unfortunately have bad credit events on your record. In this case, you will need to work with a specialist lender and apply for a bad credit mortgage to meet your needs. You will not find these lenders on the high street, but the good news is that bad credit mortgages are indeed available to first-time buyers – you just need to know where to look and who to deal with.

You may be relieved to know that your experience of homeownership is largely irrelevant to the lender’s assessment, as their decision to lend is mostly made depending on the level of bad credit the applicant has, as well as the amount of deposit or existing equity. You will not be penalised for being a first-time buyer alone.

The questions will focus around the adverse credit issue(s) – when did they happen? What was the nature or severity of the issue or event? What were the amounts involved and have there been attempts to settle? Obviously, a few missed credit or store card payments three or four years ago will have less impact than a CCJ or a repossession within the last twelve months.

Many other factors will also be taken into consideration during a lender’s assessment of an applicant, and if you have bad credit of any sort you would be well-advised to speak to a specialist bad credit mortgage broker about your situation. They will have a good understanding of your circumstances and how you came to be in them, what measures you can take (or have already taken) to repair your credit history, and also of the mortgage market itself to see what your possible options may be. Get in touch with our team today to get more clarity on your next best actions.

An introduction to Bad Credit Mortgages

Bad Credit Topics

Whether it be late payments, defaults or CCJs, we’re here to help you secure a mortgage.

Useful Information

Bad Credit mortgages for First Time Buyers

Being a first-time buyer and finding a home to give you that vital initial step on the property ladder can be an exciting time, but it can also seem daunting where getting a mortgage is concerned. To add to this, if you also have a history of bad credit that may affect the chances of your application being approved, then the situation can seem all the more intimidating and you’d be forgiven for feeling anxious about ever being able to own your own home.

However, you may be happy to know that, although your status as a first time-buyer will be taken into consideration by lenders, bad credit mortgages are still available to people who are entering into homeownership and taking out a home loan for the first time. If you have had the misfortune to be turned down by a high street lender (and therefore risked a further black mark on your credit record), you will still have options open to you via specialist mortgage lenders who cater to niche-market areas of the home loan sector.

There will be a few differences between a bad credit mortgage and the usual residential mortgages obtained through mainstream providers. Reflecting the perceived additional risk of lending to someone with a blemished credit history, bad credit mortgages offered by specialist lenders generally tend to have higher interest rates than conventional mortgages, and you may be expected to provide a larger deposit than usual – perhaps anything from 15%–25% instead of the usual 5%–10% of the value of the property.

This is where it is especially important to work with an expert mortgage broker in sourcing the most favourable deal. The broker, or adviser, will go over your circumstances, understand what you need from a mortgage and help you frame your application so that it puts you in the best light possible.

Specialist lenders will make an assessment based on your overall situation, including the specifics of your credit history, but are typically more open to considering current positive factors rather than dwelling on past events. If you can show that you now have a responsible approach to credit and money management, this will help your case, and our advisers will use their expert knowledge of the mortgage market to source the right lender for your needs.

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First time mortgages for Bad Credit

Getting expert impartial advice on the most competitive first-time buyer mortgages for customers with bad credit can be vital in securing the right mortgage to meet your exact unique circumstances. The world of specialist mortgages can be almost impossible to navigate under your own steam, and you will never get the full picture of all the deals that are available because of the way the majority of specialist lenders do business, without advertising to the public.

We pride ourselves on paying close attention to our clients’ needs, getting to know their aspirations and priorities as well as their financial issues, so that we can give them the right possible advice. When working with us, you’ll get your own personal adviser who will stay with you throughout the duration of the application process, guiding you around the actions you’ll need to take, the documentation you’ll need to provide and the ways to make your mortgage application as attractive as it can be.

This kind of personal attention at a time in life that, for inexperienced

We are also able to give first-time buyers rock-solid advice on repairing their credit score, finding ways to lessen the negative effect a poor credit history can have on their ability to acquire a mortgage, and building the foundations for a healthier credit score in future. We want applicants to see a continued improvement as they secure their mortgage, helping them to become better lending prospects when they come to review their deal.

Our expert mortgage brokers are ready to discuss your circumstances and advise you on the mortgages available to meet your individual needs – get in touch today.

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Bad Credit Mortgages for First Time Buyers FAQs

Having a low credit score can be attributed to many things.  It could be that you have a history of bad credit that is affecting your rating or possibly for some first time buyers this could be down to the fact that you have little or no credit history.  The reason for the low credit score is perhaps the more critical element of you being approved for your mortgage however, being a first time buyer should not be seen as a negative point as this alone plays a very insignificant, if no part at all, in the lenders assessment.  All lenders use their own individual ways of making an assessment, and where some may use a very system led credit scoring process, others will use a more human approach making a manual credit check rather than relying on a computer generated credit score.

As a first-time buyer with a bad credit record – either through an adverse credit event, or due to no credit history at all – you might expect to find a few more obstacles than usual placed in your path to getting a mortgage. Mainstream lenders and those on the high street might be reluctant to extend an offer of a mortgage to anyone who does not fit their ideal credit profile, but there are a large number of ‘bad credit mortgage’ lenders who could be willing to accept your application.

These specialist lenders offer mortgages to people with all kinds of bad credit issues on their records all the time, and just because you are a first-time buyer, this does not make your case any different to the others. They will take an overall view of your circumstances – your financial history, your current levels of income and outgoings, the nature and age of any bad credit events on your records, and what you have done to improve and maintain a healthy credit score more recently.

The best way for a first-time buyer to get a mortgage with a bad credit record is to talk over their situation with an expert mortgage adviser – one who will be able to recommend exactly the right lender and product that will suit their needs. Specialist lenders do not generally offer their services directly to the public, and so you will need to work through a trusted intermediary – such as ourselves at Just Mortgage Brokers – in order to submit your application and give it the best chance of success.

If you have a bad credit issue on your financial records and want to get a mortgage in the fastest, easiest and cheapest way possible, then you might think the best thing to do is to try approaching specialist mortgage lenders yourself. However, while going direct to source can be the best course of action for a number of purchases, when it comes to finding a mortgage when you have adverse credit events on your files, there are a number of reasons why you will be best-served by talking to a specialist mortgage broker in order to get the right deal.

The first and most basic reason for not approaching a specialist lender yourself is that they simply won’t deal directly with the general public. Due to the specialist nature of their business, they are not able to field all kinds of queries and questions from people who are unfamiliar with their offerings, and who should really take advice on their situation before applying for a mortgage with bad credit. The vast majority of specialist bad credit lenders will only accept applications made via a trusted intermediary – therefore ensuring all parties know what they are getting into, and that the applicant knows that their product is the right one for them.

Secondly, applying directly to any mortgage provider yourself when you have a bad credit record, especially one of the specialist lenders, will increase the chances of your application being turned down, which will in turn only further harm your credit report. You may spend time looking for a lender that appears to be right for you, only to find it isn’t the case, and every time you apply for a loan and it gets declined, a note is made. Working with a specialist mortgage broker to identify and apply for the right mortgage to meet your needs will mean your application is as strong as it can possibly be, and stand the greatest chance of success.

Finally, while any particular lender will only be interested in selling their own products, a mortgage adviser is able to give you sound advice on a huge range of mortgages and lenders. Do you know which lenders you might not have heard about, or missed in your search?

Feel free to get in touch with our team at Just Mortgage Brokers to get a clear overarching view of your situation and honest guidance on your options for a mortgage with bad credit. With our deep knowledge of the network of specialist ‘bad credit’ lenders and access to over 12,000 mortgage products, we will be able to find rates you won’t be able to find yourself, often on an exclusive basis thanks to our relationships in the industry.

You may have noticed a number of advertisements on TV and radio about methods and services to easily check your own credit score for free, and without harming your credit rating. The latter point is a little unnecessary – checking your own credit record has never caused any issues with your credit rating. It’s never been easier to check your own credit score than it is now, but just be careful if you use a free service not to be persuaded into a paid subscription that you don’t really need.

The conventional way to check your credit score is to contact the three main credit agencies in the UK and ask for a report. The agencies are Experian, Equifax and TransUnion (formerly Callcredit), and they will have instructions on their website for the simple procedure to follow. They used to charge a small fee (around £2) for this, but since GDPR regulation came into place in 2018, it’s now free. The service also used to be mail-only, but is now performed online to make it quick, easy, low-cost and sustainable.

It’s advisable to check with all three if you can, because each of the agencies calculates your overall credit score in a slightly different way, and it is also possible that one or more of the agencies may or may not have the same information as the others – in which case you should take steps to ensure that the information held on file by all of them is accurate and up-to-date. The statutory report will contain your personal details, information on financial links to other people, your credit accounts, any missed payments or defaults, any searches made against your name in the last year and whether you are on the electoral roll (if you’re not, then register as soon as possible).

It’s also possible to use CheckMyFile to check all three at once online. They operate a free trial period, so remember to cancel the subscription in time if you don’t want to continue with their paid service.

Once you’ve checked your credit rating and are satisfied it’s all correct, then you can take any steps needed to remedy any bad credit notes on your file – either by paying off debts, cancelling unused store cards, taking out a credit card to use responsibly for everyday spending, and staying up-to-date on all your ongoing payments.

The range of advice we can provide to first-time buyers with a poor credit history looking to secure a mortgage on their own home will vary according to your particular circumstances, and will depend on several factors. To name a few:

  • The nature and severity of the bad credit events on your record
  • The amount of time that has passed since these events occurred
  • Your current level of debt
  • Your current income and outgoings
  • Your payment/credit history outside of the adverse credit
  • The market value of the property
  • The amount of deposit you are able to provide

The journey to obtaining your first mortgage will always begin with a conversation. The initial consultation with one of our specialist advisers is free with no obligation, and in it we will go over all the circumstances around your credit record, your current financial situation, income and outgoings, and make an assessment of your affordability. The amount of money you will be able to allocate each month to your mortgage payments will be decisive in working out the level of borrowing you will be able to obtain from a lender.

We’ll then research the mortgage market to find the mortgage suitable deal to meet your requirements, including mortgages offered by specialist lenders catering to people with bad credit, which will not appear in conventional online searches or ‘best-buy’ tables. We’ll then present our findings and recommendations to you so you can see your options, and maybe also informally contact certain lenders to see if a better deal than that advertised could be possible in your circumstances.

Why choose Just Mortgage Brokers for your Bad Credit Mortgage?

  • This is our speciality – it’s what we do
  • Direct access to lenders underwriters enabling us to discuss your situation in detail
  • Exclusive deals available
  • Broker only bad credit lenders available to us giving you greater choice
  • Unlimited mortgage broker – giving a wide range of lenders at our disposal
  • Great customer reviews

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