Help to buy/credit worries

Firsthomehope

Hello,
I want to buy a house with a joint mortgage. The house will be 261,000 and the deposit will be 10% at least but we could offer a bit more.

my partners credit score if great, mine is just below fair due to a series of arrears which was finally paid off in mid-late 2019. This of course had a great effect on my credit score however this was a mistake made when I was a student. I have been in full time employment on a salary for 1 year now (first time outside education) saved 20% of my salary, have a healthy bank balance every month and have never missed a payment since. (I’m hoping stating these things to them would help my case)

My work is also agency based even though I am a key worker so we have struggled finding a lender that will take us because of that reason mixed with my credit file. We were told that the new funding for help to buy is released in September-October and I wondered if we would be more eligible for this or more likely to be accepted because the monthly payments are lower they would see we would more likely to be able to afford it/stick to it and that we could put down a 10-15% deposit down. I am qualifying to be a teacher at the minute so my salary over the next 1-2 years will jump from where it is now (training, unqualified wage) so was hoping they would see that too, that my circumstances will change.

anyway, if you have read this far thank you and some advice, especially those who have similar experiences are most appreciated.

tim_london

Let's break apart your worries into separate areas -

HTB or not to HTB - Not sure when you got the funding information from.  HTB has always been here and will continue on.  There is a change coming up in March that reduces the maximum house price criteria based on regions although London will remain the same.  Also people who are not first time buyer will be excluded to HTB.  Based on your £261k number this does not really affect you at all.
HTB or not HTB comes down to whether you think new build are for you.  There are no right answer and there are many threads on that.  HTB process in general is more relaxed than mortgage, so If you can get a mortgage you are most likely able to get HTB.

Combined credit score - Joint application does not work by taking the average of you and your partner's credit score.  It's actually a bit more complex than that and different lenders look at it differently.  Best suggestion is to contact a mortgage advisor.  They are more choices of lenders out there than the big banks even if big banks offer the best rates.

Mortgage advisor/broker - Many mortgage advisors and their company offers free advice.  And generally they will only charge once you've actually bought your house.  Even then many will charge the lender (if the mortgage is large enough) so nothing comes out of your pocket.  This does not necessarily mean you will get a worse rate than if you went direct to the lender.
Suggestion: there are many MA on this forum, reach out to one you like the posts on.

Improving credit score - I'm not sure how/when you've checked your credit score.  A year is enough time to completely overturn a credit score.  However never missing a payment is not enough, for example are you paying your credit card balance completely so you are not paying any interest?  Do you have any outstanding loans?  Do you even have a credit card?
Suggestion - the free Experian credit score tool is a good indication of what the bank will see you.  Also get your free statutory report (from Experian or others like Equifax), this is the raw data that the bank real person will use to assess your ability to repay.  Get it and imagine if you were lending money based on the report, would you based on what you see?

Affordability - Credit score is a mean to see if I would lend anything to you, it is different to affordability check.  In general lenders will say 4.5x your salary is what they would lend you.  But this does not take into account spending and outgoing.  Lenders will get a real person (underwriter) to check your income/outgoings.  And no - they will not take into potential increase in salary into account.  They will not just check things on your credit files but also personal commitments, i.e. if they see you transferring a bulk of money to your parent/relative, they will dig deep into it to make sure it is a good will gesture and not an obligation.  
Suggestion - do a budget yourself to see if you are ready, simulate few scenarios like boiler breaking or mortgage payment increasing 10% due to interest rate going up.  Would you survive?  There are many thread in the 'mortgage free wannabe' section on budgeting around mortgage payments.

Buy now or buy later -  Yes, ideal situation financially is to save up 25% deposit for the best rates, stable income and perfect credit scores but we all know too well here that is rare and hard to achieve.  10% deposit is not end of the world, you are paying extra for the privilege for owning a property earlier.  In some cases, the extra interest still beats paying rent if you in that situation. 

MovingForwards

Ignore the credit score and rating as it's not seen or used by any UK financial institution, it's the credit history they see and use when assessing applications.

Haven't you already got any thread going asking the same questions?

Edit to add - have you visited any of the 5 other threads to see what people have said.

haras_n0sirrah

Currently 10% deposit on the open market is only perfect credit need apply so if that doesn't fit your circumstances then help to buy will give you better rates and mean you have to put less of your own deposit down. As others above have said some of us who post here are brokers and we are identifiable by our signatures. We are not allowed to approach posters but most of us are happy to respond to pm's asking for help.