Help to Buy - Grey Area...Advice Please!

ricky2389

Hello MSE's

Need some advice on the new Government Help to Buy Scheme.

I am looking to buy our first property with my partner as we're expecting a baby.

Unfortunately we have had not had the best of times of late and 3/4 of the way to paying off our £10,000 debt run up - so our credit rating is shot to hell.

I have been reading up on the Help to Buy Scheme and looks like we're ruled out due to the poor credit history.

However,

I have the deposit available via an inheritance so no issues in that respect...

I was looking at asking my mother to apply for the help to buy scheme on our behalf, so everything is in her name but we make the mortgage payments into her bank account.

I'm aware that the Help to Buy Scheme cant be used to buy a 2nd house but although my mother does live in her own house, there is no mortgage on the property so not sure where she would stand in that respect.

Do any of you guys have any advice that you could offer?

We have enough for the 5% deposit required, but couldn't stretch to anything larger than that at the moment so the Help to Buy Scheme is perfect.

Thanks

mail2z

Your mother cannot use help to buy for second house regardless of her current mortage situation since she already owns a house.

If you have a deposit available I am not sure how help to buy is going to be helpfu in your case. I would suggest a normal mortgage.

You should try a specialist mortgage broker who deals with poor credit situations. Expect the interest rates to be high though.

ViolaLass

ricky2389 wrote: »

I'm aware that the Help to Buy Scheme cant be used to buy a 2nd house but although my mother does live in her own house, there is no mortgage on the property so not sure where she would stand in that respect.

She owns a house. No grey there at all.

ricky2389

We have a deposit available, but only enough to put down 5%, so a 95% LTV would be required.

My reasoning for the grey area is all the websites which talk about Help to Buy all say different things. It doesn't make reference to this on the GOV.UK website but does on others. There doesn't seem to be one set eligibility anywhere, all say different.

Thanks for your help, will look at other avenues. I believe Halifax offer 95% mortgages away from the Help to Buy Scheme so will look into this.

ging84

that's not a grey area, it's clearly not allowed and would be fairly easily checked as your mother's name will be on the land registry, you might not think it is against the spirit of the scheme, because it's not for personal gain, but it would mean the lender is indirectly lending to someone they might not choose to lend directly to.

Have you actually checked with a mortgage advisor that you would not be able to get a mortgage with your credit history? i'm sure there may be more to your story, but £10k of debt 3/4 paid off already is usually very positive on a credit report.

ricky2389

My credit score is on the up but is still in the very poor category. I have been told though that it can take up to six months to reflect such repayments. Unfortunately time is not on our side as the baby is due in February so need to get things moving shortly.

I'll try and arrange a chat with a mortgage advisor - but having checked my credit file, late payments have been recorded recently and think this would affect any application badly. Either way, I'll speak with one and see what they say.

[Deleted User]

I think u will have to wait for a while. Sometimes the harsher credit assessments work.., you have yet to prove you can manage your debt load.

Use this time wisely, see it as an advantage rather than a disadvantage as if anything goes wrong with your income (job loss etc, maternity leave) its wise to have more than enough money rather than just enough.

You can have a baby in smaller than necessary accommodation. Just choose the baby equipment wisely (and use ebay esp for clothes they will outgrow in a month lol). For my 7 year old I used ebay more than anything.., and he was the smartest dressed baby u could hope for lol. No one but me knew the clothes were second hand lol. I spent a third of the money I spent on my first son!

Soot2006

Don't fall for the time pressure fallacy. You have all the time in the world, no need to make changes for an infant. Even if you're a bit cramped for a while, you won't regret taking the time to make these big financial decisions.

Can you pay off your debt now and start new deposit saving? Then everything it fresh and new and ready to move forwards

ricky2389

eBay and NCT's nearly new sales have been a godsend. So definitely squeezing every penny we can.

We're on target to clear by January but just a case of when this will show on my credit file for a mortgate.

Will see an advisor and speak with parents and decide a best course forward.

Thanks for all the advice, much appreciated.

Kynthia

I sympathise, I too am pregnant and desperate to find a house near family before my due date. Unfortunately if your mother buys a house she doesn't intend to live in, it must be a 'buy to let' mortgage otherwise it's probably mortgage fraud. She would need a very large deposit, to comply with all landlord regulations such as gas safety certs, and would need to declare your 'mortgage payments' to the HMRC as income.