late payment effect on Help to Buy mortgage

amni1987

Hi. Posted this in mortgages but didn't get a response, hoping for some help here.

My partner and I are hoping to apply for a 5% Help to Buy mortgage (mortgage guarantee option) early next year. We will have our deposit by end of November, and will start looking at properties in January.

We are confident about the affordability, joint income is £37358 gross, and our only monthly committments are a joint loan at £126 per month, and a student loan of £39 per month. Currently living at parents so very few other outgoings. We hope to buy a property at a maximum of £120,000. So max mortgage £114000, our ages are 25 & 27 so we will look at a 35 year term for now.

Our only concerns are partners credit report. Both our reports are fine for the last 3 years, i.e. no missed/late payments, all correct accounts showing, on electoral roll, pay off credit cards in full each month etc.

The only blemish is on partners credit report from a few years ago, when he took out a loan for his sister and she made late payments. As soon as we found out it was paid up to date, and settled shortly after. We are concerned because we hear that for a Help to Buy mortgage, you have to have nearly perfect credit history. The loan was recorded on Equifax (the lender does not report to Experian or Call Credit so it isn't on there).

It reads as follows on the report (0=fine that month, S=Settled)

2011- 3 3 0 0 0 S (settled June 11)
2010- 0 0 0 0 1 0 1 0 1 1 1 2
2009- 0 0 0 0 0 0 (started June 09)

Do any experts out there on HTB applications think this will cause us major problems?

Thanks for any thoughts/advice

thebritishbloke

I don't think it will cause you major problems, but you might be better off going to a mortgage broker rather than just your favourite bank.

Thrugelmir

amni1987 wrote: »

We are confident about the affordability,

Lenders will assess affordability and also stress test at 7% interest rates.

How much is owed on the loan?

amni1987

Thrugelmir wrote: »

Lenders will assess affordability and also stress test at 7% interest rates.

How much is owed on the loan?

We owe £7000 on it, with 6 or so years left to run. It was initially £13000 in Jan 2013 but we overpaid all last year to get it down, and moved it to a lower rate elsewhere in March this year.

As I say, no other committments. DD's we have are; mobile phones, both pay as you go, mine is £10 his is £15. My work union which is £14.90, Netflix £5.99, and thats it DD wise. We also give my mum £300 board as well but obviously that'd stop if we have our own house. We buy our own food/toiletries. My salary increased in July, and since then we've been saving minimum £1000 per month.

Do you think that sounds okay for a £114000 (max) mortgage over 35 years?

Thanks again