Help To Buy Elegibility

wpearson92

Hi all,

Ive been given an agreement in principle for an 85% mortgage at the maximum I can borrow.

I have been looking at houses in my area and there are a few new builds around and accept Help to buy.

The reason for the maximum of 85% is due to an early problem on my account, I switched banks and set up a monthly repayment plan on the overdraft believing it wouldn't be shown on my credit report as missed payments. As soon as I noticed this I settled the account. On my report it shows as 3 Months of arrears. This was settled last October.
Apart from that my credit report as no missed payents on all my credit accounts.

I am 21 years old earning a salary of £40k.

What will elegibility be for the Help to buy equity loan.

kingstreet

Nothing to do with credit history.

If you can get a mortgage from a HTB Equity Loan lender, you qualify.

As long as you are at or below 4.5 x income, within 45% debt to household income ratio, repay the mortgage before 70 and the mortgage is at least 25% of the purchase price, you can have an equity loan of 10% or 20% of the purchase price.

http://www.helptobuy.org.uk/docs/default-source/default-document-library/help-to-buy-equity-loan-buyers-guide.pdf?sfvrsn=4

wpearson92

So basically If I get accepted by a mortgage lender that accepts HTP equity loans I can use them?

What are the criteria these banks look at? the actual mortgage agreement in principal is not with the bank offering this product.

So If i put up say £13,995 on a house Based on the full market value of £134,995 and get a 20% loan, would the bank then try and qualify me for a LTV of of 70%.

Would this then help my slightly adverse credit because I have a larger deposit. Its just I havent been able to get an agreement in principle with a main street lender with anything other than a LTV of 85%

Sorry I know its hard to state what I actually mean, I hope you understand it

kingstreet

With a 20% equity loan and 10% deposit, you would be looking for a 70% mortgage, but the approach to this differs from lender to lender with some basing your LTV for underwriting purposes at 88ish% of the equity share you are purchasing.

wpearson92

Ah right I see, So would you go through the actual company building the house or would you go see a mortgage broker or high street lender.

I have had a previous meeting with lloyds but they wouldnt accept me for a 90% LTV...

kingstreet

A newbuild experienced broker would be your best bet.

They are likely to be able to establish the lender most likely to accept your application and able to deal with any builder cash incentives which may apply.