Bad Credit and Help to Buy Scheme

kay_1

Me and my husband are looking to purchase a new home at a price of £280,000. As it is a New Build the builders are currently offering a Help to Buy Scheme which would require us to provide 5% deposit (£14,000) and they would lend us 20% therefore requiring us to obtain a mortgage of 75%.

We have a joint income of approximately £60,000 and each month after bills have been paid are left with approximately £2,600 to save/play with. We currently have £10,000 in our savings and have equity in our current home of approximately £10,000.

The thing is approximately 4-5 years ago I went through a bad patch with money and defaulted on various accounts. I have 6 defaults, all for under £500 and 5 of them for under £200. All defaults have been paid and marked as satisified for 6+ months. I also have a CCJ for a college course that I didn't complete. This again was for under £200 and has been marked as satisified for 6 months.

I have no late payments on my file for over a year. My husband has a excellent credit rating.

What do you think our chances of securing a 75% mortgage are?

Thanks

kingstreet

The eligibility for FirstBuy included a clean credit history. Has that been carried over into HTB? Have you spoken to, or applied to, the HCA Homebuy Agent yet?

With six defaults and a judgment, even at 75% there may be limited lending options and the issue will be if the lenders open to you accept shared equity business. Could your husband apply alone, now the bedroom and income requirements of FirstBuy no longer apply to HTB?

Chances are, the builder will want you to talk to their broker, so it might be worth talking to them now.

samsmith88

Hi Kay_1
Can I ask how you have got on with securing a mortgage with you r history?

kay_1

Hi I spoke to a mortgage advisor who said I'd have no chance of being accepted on this scheme as you need a squeaky clean credit history. I believe it's on high street lenders who offer mortgages on this scheme and they won't consider lending you money if you have a bad credit history. Therefore we have decided to do it the old fashion way and save up for a 15% deposit.