Help to Buy Mortgages with Adverse Credit

Bad Credit MortgagesUntil recently there were no mortgage options available to people with an adverse credit history who want to proceed with a mortgage application under the government backed Help to Buy or Shared Equity schemes.

Within the scheme, the government provides a 20% equity deposit and under the London Help to Buy scheme this can increase to a 40% deposit. The applicant then has to provide a minimum of 5% deposit from their own resources up to a maximum of 20% own deposit.

There are no repayments to make in respect of the government equity stake for the first five years of the mortgage term, then interest is charged at the prevailing rate, currently this is around 1.75% of the equity stake mortgage amount, so this will be factored into the mortgage lender’s affordability calculations.

There are now two mortgage lenders operating Help to Buy schemes where past adverse credit is allowed for, each lender has their own criteria, but past defaults and CCJ’s are accepted depending on the amounts and dates they were registered.

Please note, that at present, the adverse credit mortgage lenders only accept applications for a new build property where the builder is registered under the government’s Help to Buy initiative.

For further details and to establish if you are eligible for the Help to Buy adverse credit mortgage products, please contact us today for a no obligation assessment.