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First Time Buyer-Bad Credit
The home buying process can be daunting enough without having to consider where you may need to go, or who you may need to contact if you also have some bad credit. There are no more obstacles in the way of a first time buyer than there are for a home mover or a home owner looking to remortgage. It is the fact that you will need advice on not just the purchasing process but also extra guidance with finding the right lender that makes it a tricky combination. Depending upon the credit issues that you have had, it is unlikely that a high street lender will consider your application and therefore you will need the help of a mortgage expert. Get in touch and we will organise a mortgage expert to contact you and guide you through this process.
Will I need more deposit?
Possibly but lenders who consider applications for people with bad credit can lend up to 90% depending upon the severity of a person’s credit profile. If you have access to a 15% deposit then the number of deals available to you will widen. It really does depend upon the age of your bad credit, the amount registered of any CCJ’s or defaults and the number of bad credit events that an individual has had. Speaking to a mortgage expert will hep as they will know what each lender will accept and the relevant deposit levels needed to make an application work.
Will I go through more checks?
Lenders who consider bad credit within a mortgage application take more of a risk so they will assess your case with more scrutiny. This does not mean that they do not want to lend to you but they will want to satisfy themselves that the level of bad credit, desired deposit and case profile of an application is acceptable to them. Typically, they will want an explanation for why the bad credit occurred, a full income and expenditure assessment and generally more stringent checks on the case as a whole which will mean a more manual underwriting process than you would expect from a high street lender. Again, seeking the help of a mortgage expert will help you negotiate this process successfully.
Will I need a credit report?
A credit report will be essential for a mortgage expert to help you. They will need to see exactly what credit issues you have been through, how old these issues are, the amount that they are for and if they fit within the lending profile of the potential mortgage lenders available to you. See our credit reports page for more information and access a link to checkmyfile.
Will my costs be higher if I have bad credit?
The extra work needed by a mortgage lender to assess your application will mean higher costs for them and a more time-consuming process. This will generally lead to valuation fees either being chargeable or being higher than lenders with a more digital process who by default spend less time underwriting cases. Administration fees to cover initial costs to these lenders are also common and this is why it is essential that you engage the services of a mortgage expert so that you have a much better chance of being accepted by the right lender, for the right deal before paying out for associated mortgage fees. Get in touch and we will organise a mortgage expert to contact you.
Will my employment status affect me?
Your employment status will have an impact on how your mortgage application is considered and underwritten. If you are employed, then a bad credit lender may want you to have had a minimum length of service with your employer and be out of any probation period. If you are self employed then they may want to see that you have two years’ worth of accounts or tax returns that they can assess. Certain lenders will be happy to look at your most recent years accounts as long as you have been trading for two years, although they may also want you put down more deposit to be able to consider your application. Your mortgage expert will let you know what you will need in order for you to progress. Get in touch and we will organise a mortgage expert to contact you.
What else do I need to know?
Your mortgage expert can discuss the whole buying process with you. They will take you through all of the steps necessary from gaining a decision in principle that will enable you to put an offer forward on a property, putting you in touch with the right conveyancer who will help the legal side of the purchase, obtaining the documentation needed by the lender to assess your application right through to obtaining a mortgage offer that will secure your funding from the lender. Utilise their skill and knowledge by making a quick enquiry here.
As a mortgage is secured against your property, it could be repossessed if you do not keep up mortgage repayments.