Help to Buy post credit difficulty?

YorkshireT

Hi,

I just wondered if anyone could offer some advice / experience on this issue. Basically, I feel like I need to make a decision on whether I can feasibly get a mortgage and own my own home or not. I have never owned a property before so would be a first time buyer.

I've had financial difficulty in the past. I entered IVA in 2007 and completed in October 2011. It's something that I relate to a very tough period in my life but something I've learned a lot from in terms of financial responsibility. Although it was tough, I met all the payments of the IVA (so no issues there) and have since taken all the necessary steps (i.e. removed from the insolvency register, cleaned up all three credit reports which are now fine, and have taken out a credit card that I use regularly but always clear the balance off).

I'm now in a position where I'm debt free, I have a stable job that I've been in six years, but I have limited savings. I'm working very hard to top these up but as everyone knows its not an easy thing to live and to save the amount required for a house deposit. Realistically (all circumstances considered) I feel I can save the equivalent of 5% deposit for a relatively economical house, on top of the inevitable fees and transitional costs which will effectively swallow an additional few £k.

I'd like to own my own place as I think it's everyone's aspiration and gives that long term security and sense of purpose, but is it realistic for someone in my position or am I consigned to a life of renting?

I guess, to cut short the whole story, I'm asking:

Is there a chance that a lender out there would offer a 95% mortgage to someone that had an IVA (completed nearly 4 years ago) and has since rebuilt all other aspects of creditworthiness. Or does someone with my history (which I know is not good - my eyes aren't closed to how bad an IVA is / appears) have to raise an almost unattainable deposit to be considered for a mortgate?

I feel I need to get my head straight on this issue so I know whether I'm likely to continue renting or whether I can plan to save more for my future. I know a lot of people will ask; can't you just save the extra to make up a 10-20% deposit? But with house prices as they are I just don't think it's realistic in my circumstances. I don't have an asset to sell off to raise it, so it's all putting money aside on a monthly basis on top of renting and living - and it could take more years than I have!

Thanks

kingstreet

If there's nothing left on your credit file, you should be able to get a 95% mortgage if you now have a strong enough recent credit history.

JR26

I declared myself bankrupt in 2007 and was discharged a year later. I've recently been accepted for a mortgage with a Help to Buy equity loan (albeit with a partner, not on my own). I was told by brokers that as long as your credit score is excellent then some lenders will consider you, although some do not lend at all to previous bankrupts, not sure about those with previous IVAs though. Just make sure you get everything in order and check your credit reports. The best thing to do would be to speak to a broker as they know the lenders that have less strict criteria for credit scores and those with IVAs etc. You may not get the best interest rates but there is hope! I wish you luck with it.

YorkshireT

Thanks both for your replies and offers of hope.

Yes the credit files / reports aren't the issue as I made sure they were cleared up (which took some work at the time but everything's now okay on that score). I suppose my concerns are now that the historical question would crop up and rule me out flat at application stage, or it'd be picked up by the underwriters from records that sit below those held by the credit reference agencies. It's not that I'm trying to hide from it at all, it's just good to understand realistic expectations. I think you're right about consulting a broker. Does anyone have any recommendations of where to look? I've googled it but am always a little wary of the sponsored links and potentially exploitative companies.