Mortgage after a DRO: what lenders look for

Can you get a mortgage after a DRO?

You can apply. Some lenders consider people who have had their DRO end.

Each sets its own criteria, and acceptance is never guaranteed. In practice lenders will not offer a mortgage during a DRO, and taking on credit during the order can put it at risk.

By law you must also tell any lender about your DRO before borrowing £500 or more. Once your DRO ends, usually after twelve months, there is no fixed waiting period.

While the marker is on your file, some lenders will not consider an application, and the ones that do may be specialist lenders rather than the high street. Every lender sets its own criteria, so nobody can promise you a date.

What is true across the market: lenders look closely at how you have managed money since your DRO.

How we help

We introduce you to partners from our panel. This guide helps you understand the landscape before that introduction and know what to expect.

What mortgage lenders look at after a DRO

Every lender sets its own criteria, but a few things carry weight.

• Deposit: lenders look at the size of your deposit alongside the DRO on your file.
• Affordability: your income and outgoings face the same checks as any other borrower, and because a DRO is only granted to people with little spare income, showing you can now comfortably cover a mortgage payment matters all the more.
• Your record since the DRO: lenders look at whether there have been any new defaults, arrears or missed payments since the order.
• The marker on your file: while the DRO shows on your credit file, lenders who check it will see it. The marker leaves your credit file six years from the date the DRO started.
• Questions about past insolvency: some application forms ask whether you have ever been insolvent, and if a form asks, you must answer truthfully even after the marker has gone.

What deposit will you need?

This is the big question after a DRO, because a DRO is granted to people with little spare income. Each lender sets its own deposit requirement, so we do not quote a figure. A specialist mortgage broker can tell you what the lenders they work with ask for in your circumstances.

Why a specialist broker matters

The lenders who consider applicants with a DRO on their file may not deal with the public directly: you reach them through a mortgage broker. A specialist who works with adverse credit every day knows which lender fits your circumstances and deposit, so you apply where your circumstances are more likely to fit a lender's criteria instead of collecting hard searches on the file you have worked to rebuild.

That is exactly why we introduce you to a specialist rather than pointing you at a comparison site.

Get your credit file ready first

An underwriter will read your credit reports closely, so make sure they tell the right story before any application. Check all three credit reference agencies.

The DRO itself should show correctly with the right start date, and every debt included in it should be recorded as part of the DRO, not as open or defaulting afterwards. The debts won't show as paid or settled, which is normal.

Mistakes do occur, and they can be fixed, and clearing them up early costs nothing but a little time. It is also worth noting your DRO end date somewhere safe, because nobody writes to tell you when it ends.