Mortgages for bad credit

[Sunshine288]

Hi all, hoping for some advice/words of wisdom.
Myself and my boyfriend are hoping to buy our first house next year (currently renting). Recently found out I’m pregnant so ideally would want to get a mortgage before baby is born as I know it’s harder to get a mortgage with dependents

However he has bad credit (CCJ in 2018, payday loans taken out in the last 6 months). He is on top of everything now and can pay off everything within the next few months so that will obviously improve his credit a bit.
I have very good credit history so hoping that will bring things up too?

We would have between 5 and 10% deposit. Is there anyone else here who’s managed to get a mortgage in a similar position?

I really don't see a mortgage being approved. Payday loans within the last six months suggest your boyfriend isn't in control of his finances. He needs to spend the next couple of years building his credit (and savings) while he waits for the CCJ to come off his record and for the payday loans to look older and less concerning. With a small deposit and an uncertain market, a bank couldn't be confident they'd recover the full mortgage value if he defaulted. His history suggests he's more likely than most applicants to default.

I think the CCJ will definitely need to come off before applying for any mortgage. By 2024, the payday loan will be relevant so it’ll all be good

firstly, congratulations on your pregnancy.

My husband and I bought our first house 3 years ago, DH had great credit, I had one default that was 4 years old, although it was settled.
We did use a broker, and we did manage to get a mortgage, with Aldermore, but we had to put down 25% deposit and our interest rate was 4% (seems low now but 4 years ago those with good credit were getting close to 1% interest rate)
If you have a look on the aldermore website you’ll get a rough idea of how much deposit you’ll need and approx interest rates based on what adverse credit there is.

You are right that dependants change affordability, however, you are already pregnant so even if you applied for a mortgage now lenders would factor this in, and if you didn’t tell them but they then later found out, well, you can expect any mortgage offer to be pulled.

you’re honestly better off waiting for that ccj to drop off in a couple of years, any lender that offers you a mortgage with a ccj will want a ridiculous interest, and that’s without the current rates.

Speak to a broker

Thank you all for your comments!! Will definitely be speaking to a broker just wanted to get an idea if my mortgage dreams will become a reality 😂waiting a bit longer isn’t the end of the world so seems that’s best for us!

You can get a mortgage but please look into finding a good broker , one company that do give mortgages for people with adverse credit is The Mortgage Lender or TML , you’ll get a higher rate but after your fixed had ended it gets better, providing you kept on the straight with the debts. I would keep the pregnancy quiet for now if I was you

Thank you @pompei8309 will have a look into those!

Definitely possible with a specialist mortgage provider but you'll really pay for it in terms of rate.

As someone who spent decades with a husband who was shit with money please just think about if you really want a future with this person? As soon as you start linking finances it affects your credit history I believe.

Hi OP, contact chartwell funding, they are a specialist broker who dont charge the earth. They are linked to L&C and were really helpful.

There are good and less good points here:

The CCJ falls off his credit record after six years. So time in 2024 it stops mattering. I wouldn't apply for a mortgage until then.

If the payday loans are being repaid, they won't have much affect on the credit score usually. But get him to stop taking them out so you'll have at least six months of bank statements showing you're living within your means.

The 5-10% deposit is probably your main issue - that's low and will drive you interest rate and repayments.

It's just the right time to plan: how much can you save before CCJ comes off his record? Can you get to or over that 10% in that time?

People get past the kind of record you describe - I did. Planning what to do by when makes you feel much more secure. If he can pick up extra work before baby is born, that will be good for all of you.

Agree contact a broker but with request for advice on possibilities after CCJ drops off. Use that time to save more on the deposit.

Hi all, thanks for your replies but this is actually quite an old post now!
We decided to continue to rent, with the aim to buy next year when his CCJ has dropped off. Since this post he’s actually paid off the payday loans and the credit cards he had so it’s already made a massive difference to his credit score ☺️

So sorry! Glad you are getting on well 😊