Posted on 3 February 2016 by Caroline

I have poor credit history and have a small debt (around £8,000) for which I am paying monthly. I have had no missed payments in the last 5 years but have been on a Debt Management Plan. I have been in my current job for 4 years. What are the chances of getting a mortgage, I am a first time buyer? What would I need to do to improve my chance of being accepted?Many thanks.

Hi Caroline

Thank you for your query submitted on our website.

You have a reasonably good salary of £36,000, no missed payments in the last 5 years and it is unfortunate you got into financial difficulty in the past resulting in a Debt Management Plan. However the plan will formally ensure that the debt of £8,000 is finally repaid. Can you confirm when the Debt Management Plan came into force?

It would be a good idea to check your credit rating with Experian or other credit agencies. This will highlight if you have missed anything and no other defaults registered under your name which you may not be aware of.

I’m afraid to say as a First Time Buyer, looking to borrow 90% with credit issues- you will struggle to secure a mortgage in your present circumstances. I would recommend affordability permitting to try and pay extra each month to repay the debt quicker and realistically you will need around 15% or more deposit which also suggest to the lender that you are serious about securing a mortgage. As an Independent, Whole of Market broker, we also deal with those lenders who still manually underwrite cases and can therefore judge each application on its individual merits and would suggest you call us when your circumstances improve.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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