Adverse Credit First-Time Buyer

Adverse Credit First-Time Buyer: Mortgage Offer in Under 2 Weeks

Our clients had always wanted to buy their first home for their family, but never thought they could because of their credit reports. Affordability wasn’t the problem. Finding a lender whose criteria they met was. Adverse credit is a common reason for a bad credit mortgage declined decision, but this case went the other way.

We found a lender whose criteria our clients met, reached mortgage offer within two weeks of applying, and secured a 5-year fixed rate that kept their payments within budget.

The scenario

Our clients came to us wanting to buy their first home for their family. They had always hoped to, but didn’t think it was possible, because of their credit reports.

From the first enquiry, we looked at affordability, which worked with many lenders. The issue was the adverse credit, which appeared on both applications and was complicated.

The challenges

1. Complicated Adverse Credit

   Both clients had adverse credit, so the case couldn’t go to just any lender. The details mattered, and they needed to be checked against each lender’s criteria.

2. Matching Lender Criteria

   Although plenty of lenders were affordable, the challenge was finding one whose criteria our clients actually met. That meant checking criteria with lenders rather than assuming.

3. A Higher Rate Than Hoped

   With adverse credit on both files, the rate was always going to be less competitive than for a mainstream applicant, and it came out higher than we had first hoped.

The solution

We started with the affordability, which showed that income wasn’t the obstacle. That meant the work was in the criteria, so we made many phone calls and sent emails to lenders to check where our clients’ credit history would be accepted, before choosing where to apply.

Once we had found a suitable lender, we submitted the decision in principle. When it was accepted, we got the case underwritten as soon as we could. Our clients provided their documents promptly, which helped us reach offer in under two weeks.

From there, we spoke to the solicitors and our clients regularly to keep everyone updated, and made sure the case kept moving towards completion.

The rate was higher than we had initially hoped for, but we secured a mortgage within budget on a 5-year fixed rate. That gave our clients certainty over their payments for a suitable period.

The outcome

The mortgage completed and our clients have now moved in and are starting to decorate, turning the house into their home.

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