The top 5 bad credit lenders for first-time buyers with a low deposit

The best mortgage lenders that specialise in first-time buyer financing

It can be hard getting a mortgage if you’re a first- time buyer and can be even harder if your credit score is low/poor or bad. Most lenders want a larger deposit from first-time buyers, too.

If you’ve found your dream home but can’t get your hands on a large deposit, one of these five mortgage brokers may be the answer to your increasing desperate search for financing.

1.  Aldermore

Aldermore are definitely first-time buyer specialists, and also offer mortgage products for Help to Buy applicants. In February this year, Aldermore cut the rates on many of its highest loan-to-value products, with mortgages of up to 95% loan-to-value available. They offer a variety of fixed-rate products, with two, three, and five-year terms.

Aldermore also offers ‘family guarantee mortgages’, enabling first-time buyers to more easily get on the property ladder with the help of a guarantee on their parents’ or grandparents’ home.

2.  Kent Reliance

Kent Reliance treats every application on its own merits, and they will lend up to 90% loan-to-value. Their interest rates are competitive, and they specialise not only in first-time buyers, but also those with difficult income circumstances, such as self-employed and contractors.

If you also have other financial issues that are damaging your credit score – such as CCJs and IVAs, or unsecured loan arrears – Aldermore will assess the reasons behind the blip and make a decision based upon a range of criteria less stringent than many lenders.

3.  Kensington Mortgages

Kensington Mortgages provides first-time buyers mortgages for a wide range of personal circumstances, including:

  • Self-employed and contractors
  • Those whose incomes include a large percentage from bonuses or overtime
  • First-time buyers with a low credit score or historic credit issues

Though Kensington was only founded in 2005, they offer a good product range and are often the go-to lender for first-time buyers who wouldn’t be considered elsewhere. They are thus a great choice for many first-time buyers, especially those who have a limited deposit as well as low credit scores or complex incomes.

4.  Secure Trust

Secure Trust is a highly capitalised niche bank, which prides itself for what it calls ‘unordinary’ residential lending. We’d have to agree with this description. It makes its decisions quickly, and it wants to lend to first-time buyers, especially those who are:

  • Self-employed
  • Contractors
  • Have poor credit scores
  • Recently (three years plus) discharged bankrupts

Working only through intermediaries, Secure Trust considers each application individually and applies flexible lending criteria before making a fast, honest decision. A refreshingly human approach in a world in which the computer so often says no.

5.  Vida Homeloans

Vida is one of our top four picks of mortgage lenders who don’t credit score, so it may not surprise you to see them in this list, too.

It makes its decisions based upon a human approach, and then adds a layer of technology to support the decisions made and speed the decision-making process.

It offers mortgages up to 90% of loan-to-value to first-time buyers, and will also consider lending on flats above commercial premises. If you want a fast decision in principle, Vida’s systems make it possible in just a few minutes. Its ‘Helping Hand’ mortgage product allows parents to assist without the need for joint ownership or their name on the deeds. This innovative product allows the parents’ income to be taken into consideration when assessing mortgage affordability for first-time buyers.

As you can see, the mortgage market for first-time buyers does cater for lower deposits, complex incomes, and a range of reasons for low credit scores. These specialist lenders are introducing new, innovative products continually. How do you access them? Most specialist lenders with the ideal mortgage product for first-time buyers will only work through a financial intermediary. If you are a first-time buyer, contact Mortgage Thoughts today, and let us help you with the best advice and widest access to the mortgage products you need.

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