Getting a mortgage as a first-time buyer with bad credit

Concerned that bad credit might be spoiling your chances of becoming a homeowner for the first time?

To help you understand the impact that poor credit might be having on you as a prospective first-time buyer, the knowledgeable mortgage advisors at UKMC can answer some of the most frequently-asked questions surrounding mortgages for bad credit first-time buyers in the UK.

What is ‘bad credit’?

Bad credit simply refers to an individual that typically has a history of not repaying loans, failing to pay their bills on time, or is in a significant amount of debt.

You may also have poor credit if you don’t have any kind of loan repayment or bill-paying history, such as if you’ve recently turned 18 or have just moved to the UK.

This is because lenders have nothing to assess your ability to make payments on.

As credit scoring is voluntary, most, though not all people in the UK have a credit score.

A lower credit score is an indication that you might have bad credit. You can check your credit score in the UK by using online credit report agencies like Check My File which gives users online access to both their Credit Report and Credit Score.

Why is it harder to get a mortgage with bad credit?

If you’ve not taken out a loan before or used any kind of credit scheme previously, then you may be unaware of how poor credit can impact your chances of obtaining a mortgage.

As bad credit typically indicates that someone might have a lot of debt, fails to pay their bills on time (or at all), or struggles to repay loans, mortgage lenders are far more likely to see these individuals as a riskier investment.

In many cases, they will avoid offering deals to individuals that seem unlikely to be able to repay the loan to protect both the company and the individual.

Mortgage lenders will therefore analyse your credit file to understand your financial history before making an offer.

Can I get a mortgage if my credit score is very poor?

Struggling to find a mortgage for a bad credit first-time buyer? It’s true that you can still obtain a mortgage even with a poor credit score as some lenders even have specific deals designed for first-time buyers with bad credit.

However, you’re more likely to be turned down for a mortgage if your credit history features more substantial issues like CCJs (County Court Judgments) or IVAs (Individual Voluntary Arrangements).

If you are offered a mortgage deal with a bad credit history, then it’s worth bearing in mind that these deals may come with higher interest rates or require you to put down a larger deposit.

What is the lowest credit score for a first-time home buyer?

Luckily, there is no minimum credit score that you need to reach to be considered for a mortgage as a first-time buyer.

In general, lenders are more likely to be interested in your monthly income and outgoings, as well as the size of your deposit and how much you can realistically afford to pay back each month in the form of mortgage repayments.

How to increase chances of getting a mortgage as a first-time buyer with bad credit

Keen to obtain a first-time buyer mortgage with bad credit?

You’re not alone and fortunately, there are plenty of ways that you can increase your chances of being approved for a mortgage.

These include:

• Build up your credit score

If you want to obtain a first-time buyer mortgage with bad credit history, it’s well worth consulting with a CRA. They can provide you with plenty of tips based on your specific history, helping you to build your credit history in preparation for obtaining a better mortgage deal.

• Consider the size of your deposit

Put simply, the bigger your deposit is, the less money you’ll need to borrow from a lender. This can help lenders to see you as a less risky investment, allowing you to secure a better mortgage deal than you might be offered with a smaller deposit.

• Reach out to a reliable mortgage advisor

Approaching a lender through a mortgage advisor, like UKMC, can help you to gain exclusive deals with certain lenders that otherwise might not be available to you.

We can also help you to accurately complete paperwork, boosting your chances of getting a mortgage.

UKMC’s dedicated first-time buyer services

Buying your first home can be daunting enough without worrying about how poor credit might be impacting your chances of home ownership.

Luckily, at UKMC, our expert mortgage advisors have helped countless first-time buyers to secure a mortgage deal that works for them, regardless of their credit situation.

So, if you’re hoping to obtain first-time buyer mortgage with bad credit, don’t hesitate to get in touch today.

Our experienced team has vast knowledge regarding mortgage interest rates and government schemes for first-time buyers, making your first home-purchasing process as smooth as possible.

Despite being based in Warrington and therefore perfectly positioned to support first-time buyers across Cheshire, we can help customers in all parts of the UK to find mortgages for bad credit first-time buyers.

No matter what your credit circumstances or mortgage requirements might be, our down-to-earth team will talk you through each stage of the home-buying process without jargon to ensure you fully understand your options.

Once we’ve identified the right mortgage deal and lender to suit your specific needs, we’ll work with you to complete the deal and help you get the keys to your very first home.

To find out more about the range of the first-time buyer services available at UKMC, feel free to book an appointment with one of our friendly mortgage advisors today.

You can also get in touch by calling our family-run business on 01925 573328, emailing us at hello@ukmc.co.uk, or filling out and submitting our handy online contact form – we hope to hear from you soon!

*UK Mortgage Centre is a Trading Style of The UK Mortgage Centre Group. The UK Mortgage Centre Group is authorised and regulated by the Financial Conduct Authority – FRN 826982. Registered in England & Wales: 11614569. As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages. The Financial Conduct Authority does not regulate will writing and taxation and trust advice.