Louise, a mother of three, believed she wouldn’t qualify for a mortgage due to her poor credit history. However, after purchasing her first home with her family, the 43-year-old is encouraging others in similar situations not to lose hope.
Despite previously accumulating £15,000 in debt and having defaults on her credit file, Louise and her husband began saving for a deposit six years ago. Negative marks, like missed payments and defaults, typically remain on credit reports for six years in the UK. While obtaining a mortgage with bad credit can be challenging, it is not impossible, but individuals should be mindful of certain factors.
Seeking guidance from a specialized mortgage broker may be necessary as options could be limited compared to those with good credit ratings. Approval from mainstream banks might be difficult, requiring a larger deposit and potentially higher interest rates. Louise shared her experience, noting that her credit issues stemmed from past financial decisions, which she has since rectified.
After consulting with a mortgage broker, Louise and her husband secured a mortgage from the West Brom Building Society, overlooking the imperfections on her credit report. Their combined full-time employment helped meet the affordability criteria for monthly mortgage payments.
Research from the West Brom Building Society shows that many first-time buyers feel anxious and overwhelmed during the mortgage application process. Despite initial doubts, Louise and her husband were ecstatic to be approved for a mortgage on their £192,000 four-bedroom home in Prudhoe, Northumberland, with a 5% deposit of £9,600.
Currently, they are on a two-year fixed deal with a slightly above 5% interest rate, aiming to reduce it during their next remortgage. While renting, their savings fluctuated monthly, but they persevered, eventually achieving their goal of homeownership. Louise advises others not to lose hope if they have a bad credit history, emphasizing that affordability and positivity can make owning a home a reality.