Mortgage Approved for Right to Buy After a Debt Relief Order
A case study showing how a first-time buyer secured a Right to Buy mortgage after a past Debt Relief Order and a recent default.
- Publication date
- Case ID:
- 285625032
Question:
"Can I get a Right to Buy mortgage if I've had a DRO in the past and a recent default on my credit file?"
Customer situation
Single applicant
First-time buyer (Right to Buy)
Permanently employed, long-term role
8% deposit gifted by a family member
Local authority property under Right to Buy
One satisfied Debt Relief Order (DRO), registered around 6 years ago and completed after 12 months
One satisfied default for £184 on a mobile phone account, registered around 18 months ago
Why This Wasn't Straightforward
This case involved historic insolvency, a more recent default, and a Right to Buy purchase. The deposit was gifted rather than from savings, and the overall loan-to-value was relatively high. Together, these factors limited lender choice and ruled out many high-street options.
The Outcome
Mortgage approved.
A specialist lender took a common-sense view of the overall situation, focusing on the age and resolution of the insolvency, the low value of the default, and the customer's stable employment. They assessed the application on the full picture rather than relying solely on automated credit scoring.
Key points
- Loan-to-value
- 85%
- Mortgage term
- 28 years
- Lender type
- Specialist lender with flexible criteria and greater tolerance for historic adverse credit
- Mortgage Adviser
- Shelagh Dixon
Who This May
Be Relevant For
Applicants seeking a mortgage with a previously completed Debt Relief Order (DRO)
Buyers applying for a Right to Buy mortgage with historic insolvency on their credit file
Applicants told they cannot get a mortgage because of a past DRO
Buyers unsure whether a DRO from several years ago still affects mortgage approval
Plain-English Summary
This case shows that serious past credit issues don't always prevent home ownership. Where problems are historic, explained, and resolved, lenders can still take a fair and balanced view.