First time buyer.... Help to buy Mortgage - bad credit

CluelessFTB_2

Hi all,

I'd really appreciate your help and advice my partner and I are in the process of saving for a house. We have our 5% deposit sorted so we are just saving for stamp duty, legal fees, furniture etc!

I earn £30k my partner £23k both in secure employment.... I have clean credit my boyfriend has £2.5k on a card and last year stupidly and frustratingly missed 3 payments on his card. The help to buy advisor said we need to wait a year before we will get a mortgage - that's fine we were waiting till September anyway but will this affect us? I'm so frustrated with him it's untrue - proper head in sand moment!!

Many thanks

YoungBaker

TBH it is very unlikely you will get a 5% mortgage with any adverse history- although the market is picking up 5% are really difficult to get and are being cherry picked for the best customers only.

I am sure if you go to a broker you will be able to find a lender but be prepared to need to increase your deposit, and therefore the length of time it will take til you can afford to move likely.

kingstreet

On HTB it's a 75% mortgage, not 95%.

The equity loan takes the LTV down. However, a 321 on one applicant's credit history is going to make life difficult. Is that what happened?

Were they three consecutive missed payments, or three late payments over the course of a few months, showing 10101 or similar?

You will need to obtain credit files from all three CRAs and put them in front of a broker.

CluelessFTB_2

Thank you both for responding.

We are just gathering the credit reports although experian asked him for a pin which he'd get in 2-5 days but mine didn't and gave me my score of 933 straight away?!

3 consecutive payments were missed. It's whether HTB will accept us which worries me also!

kingstreet

There's no real "vetting" on HTB - Shared Equity.

I suggest getting a mortgage agreed in principle first, as this will give you a good steer in determining if making a reservation will be a good idea.

The most sensible approach to the process is;-

- mortgage agreement in principle
- reservation
- property information form (PIF).

The reservation, PIF and ID have to be submitted to your local HCA HomeBuy Agent. Once they approve it and you have confirmation of your equity loan in your Authority To Proceed. you can then think about proceeding to instruct solicitors and to apply for a mortgage.

CluelessFTB_2

Many thanks Kingstreet.

I think I will book us an appointment with an advisor and see what they say - we will be looking at September time as that is when he will have a year of good credit history and we will have saved more money.

His missed payments did not equal more the £250 and I believe that is in our favour?

kingstreet

The amount makes no difference. Is there a default registered, or nothing as bad as the "321" showing?

Is it on all three credit files?

CluelessFTB_2

Thanks Kingstreet I'll get him to do the other 2 reports what are they? Equifax? And?

Strange that we haven't had his experian back yet I'm guessing that's standard.

I think mine was at 933 as I have £800 on an interest free card - friend getting married abroad - wrong timing for us but bridesmaid duties call. The card will be clear by the time we buy.

kingstreet

Ignore these numbers CRAs call a credit score. It's just an estimate and it doesn't take into account income and employment data needed by a mortgage lender. Plenty of 999s get turned down and can't understand why...

The three CRAs and how to obtain copies of your credit file from each;-

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/order.ehtml?prod_cd=UKSCR

Experian

http://www.experian.co.uk/consumer/statutory-report.html#orderReport

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=basket_add&tpl=setRegister&package=63&amount=1&mode=clear

Bufger

Do you really need to buy right now? The lower the deposit the greater the risk of negative equity if house prices were to fall. Especially in the early years as you'll have a bigger loan to pay on a higher rate, less capital will be paid down so it'll take alot longer for things to get moving.

If you dont need to move right now i'd seriously consider getting a bigger deposit.

CluelessFTB_2

Thanks Kigstreet will look into all of those today. My other half is very worried about it - he doesn't have any CCJs or defaults that he is aware of but is so head in the sand about it. Will update later. I really appreciate your advice.

Bufger - that is an option - not one we would be thrilled about but we can consider we are living with my mum at the moment whilst we save which is fine and we are very grateful but we do feel she would like her space back as we would like our own. Obviously if it is looking like we would be better off waiting then we will do.