Help to buy ISA and credit rating

JamesCC

Hi all,

I have two quick questions regarding how opening a help to buy ISA may effect my chance of gaining a mortgage.

My fiance and I are currently looking at houses and now that the new scheme is in place we want to open a help to buy ISA to get as much as extra as possible.

Will opening up a help to buy ISA effect credit rating? this is a concern as we would be looking to buy within the next 6 months or so.

Also, can you open one of these ISAs with cash or just bank transfer? As we are trying to keep a clean a bank statement to be more appealing to lenders but want to open with 1k each.

Thanks!

JamesCC

anyone any thoughts on this please?

agrinnall

I don't recall seeing any of my ISAs on my credit reports, and to be honest I'd be a bit surprised if any savings account would be reported as there is no credit element to them (quite the opposite in fact - you are the lender). However, if you open the HtB ISA with the institution that you intend to take the mortgage with it could help your internal eligibility score with them.

I can't tell you how you can open one as I'm nearly 30 years too late for them to be of interest to me, but I'm sure each one will have the necessary information available online or with a phone call.

alchemist.1

No.

For Savings accounts they should only do a ID check (if you don't bank with them already) as no credit facility is being provided.

NewShadow

Does anyone know if that's the case with halifax?

I'm temped by their HTB, but an concerned my credit isn't great.

I approached them a while back to open a basic bank account as part of my debt management process.

I was told they do not operate any accounts without a credit check, even if that account would not be having overdraft facilities.

herbgardinia

Hi - I opened a save to buy ISA with Halifax. It has recorded a hard search on my credit file so in theory could reduce my score. However, it doesn't seem to have stopped Halifax offering me a mortgage - you would hope not! - so all seems well.

[Opened STB week after full mortgage application on the off-chance my sale takes more than three months to complete, £400 better than nothing...]

marksoton

I would think HTB ISA's are slightly different to normal ISA's, primarily because the government are also putting money in.

It wouldn't surprise me if most lenders do credit check,mainly as an extra anti fraud check and also to comply with any requirements from the government before release of their funds.

marksoton

Celifein wrote: »

marksoton:

Wouldn't an ID/electoral register check be sufficient for anti-fraud checks? Even with government funds being involved, you don't usually need a credit check. You don't have one for student loans/grants, or before you receive benefits.

They'd essentially be excluding people who have bad credit now, who might not be looking to buy for several years, by which point their credit might have improved. Seems a bit messed up. :undecided

I was just throwing it out there TBH. A cursory check of Virgin Moneys T & C's makes no mention of any credit checking on their product.

Maybe it's just internal governance within each institution?

Thrugelmir

JamesCC wrote: »

I have two quick questions regarding how opening a help to buy ISA may effect my chance of gaining a mortgage.

From the lenders perspective it will have a positive impact. Those with HTB ISA's will be offered mortgages before those that don't.

JamesCC

Thanks for all the responses, very helpful

Tygermoth

I can confirm that my credit file showed Virgin Money did a search for their help to buy ISA - I was very surprised as it has no credit facility.


We did not enquire regarding their mortgages. Just the ISA.

It was a hard search but did not alter my 'score'