First time buyer (Help to buy) - not great credit history

bt1

Hi, I just wanted some advice on a help to buy mortgage I am going to get and whether it would be possible for me to get one.

I'm currently living with parents and am looking to move out this year. I have seen a flat I like for £140k, and is available on the help to buy scheme so I would only need 5% deposit.

My salary is 26k, but I do have a loan from my bank, remaining balance is £2.9k and finishes in November 2014.

After talking to the estate agent they said I would been a max of £10k upfront, £7k for deposit, then £3k for other fees. My parents are going to gift me money to get me up to this, would this be a problem in using a gift as deposit??

Also, I haven't had the BEST credit history. I got into a bit of trouble when I was at uni, I have a few red markers on my credit file, but worked hard to clear all that debt so all accounts with red markets are satisfied.

They are:

• Tmobile - 2 red marks May 2009 - settled July 2009
• Santander card - 2 red marks Oct 2009 - settled May 2010
• Abbey overdraft - 17 red marks :eek: Jan 2011 - settled Feb 2012

(Story behind the last one, the bank removed my overdraft of 1500 while I was still at university, I did call to explain that there was no way I could pay it all back but they did nothing, once I was in full time employment (started in Jan 2010) I started chipping away at this debt and finally paid it all off in 2012)

Currently my open accounts are:

• Loan - £2.9k
• Argos card - £129
• Natwest card £0
  
• Natwest current account £0
• Tmobile £0
• Three £0

All my open accounts are all green and never missed a payment.

Just wondered what my chances are?!!

Thanks,

ACG

I dont really do help to buy mortgages so i dont know whether lenders take a view that your putting down 5% or 25%. If its the 5% then i dont think you stand a chance. If its the 25% then you may be able to find a lender who would look at this.

I would probably sit down with a broker though to run over it and see what their view is/get them to check with lenders.

bt1

Thanks, I'm hoping they view it as 25% deposit- it says LTV 75% on the paperwork from the agent. - does any one know this?

:-)

mkmini81

going through a similar thing currently. working with a broker and they advised Woolwhich would be the best bet, only condition is any settled accounts needed to be over 3 years. Just going through the process and as we thought it has been refereed so just waiting to see the outcome.

wronlaster

As you mention that you are going to do it as much it is possible for you so please go ahead ..it will give you more time , you can settle down all the things easily .

bt1

Oh, ok - doesn't look good for me then! My last red marker was jan 11, settled in feb 12 :-(

mkmini81

Speak to a good broker. The problem you/me have is there is only a limited number of companies signed up to to the H2B mortgage scheme which then limits the number of companies that would look at adverse credit.

bt1

Thanks mk, I have just spoken to another broker you has had a look at my experience report and seems a bit more hopeful than the other one. Fingers crossed!

Hope it all goes through for u!

dawyldthing

i'd be careful with a flat as they are difficult to sell on long term and are a bit like a new car in that as soon as it is sold the value will be less so will take a long while to pay off, even more so if you're only paying 5% deposit as most of the first few years are mainly just paying the interest. Look at this http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

bt1

Just thought I'd update,

Had a meeting with my broker last night and I've got an agreement in principle for a mortgage up to £127k (natwest), (my loan will now be paid off before completion)

I just wondered if anyone could tell me exactly what this means? I assume I have now passed their credit score?

I am worried that I am now going through with this but natwest will pull out at the last minute - I know it's never certain, but how likely is it looking now?!

Thanks :-)

CluelessFTB_2

Hi bt1 - I am not sure if they will do a full credit search once you fully apply, I think to get an AIP they only do a soft search?