Until 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.
Help To Buy Equity Loan Scheme and Bad Credit Mortgages
Within the scheme, the government provides a 20% equity deposit. 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. Interest is then 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.
Help to Buy with CCJ’s
There are a number of 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.
Help to Buy with Bad Credit
Each mortgage is assessed on an individual basis. Our service is designed around you and your needs. Even if you have spoken to other mortgage brokers who have been unable to help you obtain a mortgage approval please contact us. We have assisted many clients who have been declined elsewhere.
The government has made changes to the eligibility rules for the Help to Buy scheme, and it is now only available to First Time Buyers, so if you have had a mortgage or even just owned a house outright in the past, you will not be eligible to apply for a Help to Buy mortgage.
Previously, the maximum purchase price available under the Help to Buy scheme was £600,000 in all areas of the country, but regional limits have now been applied to the maximum purchase price so depending on where you are buying a property, different purchase price caps now apply as follows:
- North East £186,100
- North West £224,400
- Yorkshire and The Humber £228,100
- West Midlands £255,600
- East Midlands £261,900
- South West £349,000
- East of England £407,400
- South East £437,600
- London £600,000
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 or simply complete our Online Mortgage Enquiry Form.