Mortgage Advice - Help to Buy - Bad Debt History

JamesC3

Dear All,
I am after some advice/guidance please with regards a possible mortgage next year. Me, my wife and our two children currently rent privately. 
I have just finished a lengthy DMP - c£48k now paid off over several years. There were around 12 companies owed on the DMP. I have obtained mine and my wife's credit reports from the 3 main credit reference agencies. In the last 2 years there are around 10 pay day loans that appear. The last one was 12 months ago. I mistakenly thought they would be a good way to build up my credit score (by proving I can pay a loan back). I was mis-advised.
My wife also has one default from a credit card that was on our joint DMP showing on her reports. This won't come off until early 2022. I have one credit card that says it is now settled but has a DEBT MANAGEMTN PROGRAMME note stamped on it. All of the other debts that were paid via the DMP have fallen off the credit reports. So in summary, some pay day loans from 1-2 years ago (all fully paid), one default on my wife's reports and one DMP stamped on my reports.

We are running out of space in a 2 bedroomed maisonette at home as one child nears secondary school age and we also have a 3 year old child (they currently share a room).
I have a very well paid job, my wife not so but that means we do not have to pay any childcare costs. Of our total income my salary is 85% , hers 15% (I only say that as I'm not sure if a single or joint mortgage application would be the way forward or even if it is available as we are married). By next July we will have £20k saved (If I get a bonus at work, maybe another £3k-£5k). Not enough to look for a deposit on a 'normal' house here (Kent), but the Help To Buy Scheme is something we would like to explore. The properties that are 3 bedroomed range from £330k-£400k. From what I have read we would require a 5% deposit which we would have in 7-8 months time. 

Bearing in mind what I have said above though, do you think we would be able to get a 75% mortgage and a 20% loan from the Government help to buy scheme or would the above historic problems rule us out? 
If I don't think we will be able to obtain a mortgage I guess the other option is to rent a bigger property.

Kind regards,
James

kingstreet

Yes. There are adverse credit specialists on the HTB scheme, if needed. Your adverse may be old enough you can get something from a high street or smaller lender with a more flexible approach. A broker would be your best bet for first port of call. Your price cap is going to be over £400k in the SE so if you can prove affordability for what you need, the 5% minimum deposit may be enough.

JamesC3

Thank you very much for the reply.
That’s very reassuring to hear. I hope to be in touch in 4-5 months time. For now I will crack on with saving.
Thanks again.