How Does the Help to Buy Scheme Work for Bad Credit Applicants?
Help to Buy is a government scheme that helps first-time buyers purchase their first home. It offers an equity loan up to 20% of the property's value to add to a minimum 5% deposit.
Having a larger deposit means you can achieve better interest rates, apply to a broader pool of lenders, and find it easier to secure a mortgage at 75% Loan to Value.
These equity loans are interest-free for the first five years, after which time you need to either refinance the loan or start paying interest at 1.75% and increasing year on year.
However, if you have bad credit, can you apply to Help to Buy? And will a mortgage provider consider your application?
We'll cover these topics in this guide, but if you have further questions or need assistance with your mortgage application, give us a call on 0330 304 3040, or email the Revolution team at [email protected].
Can I Apply to Help to Buy with Bad Credit?
Yes, you can. Help to Buy has a few criteria as below, but it doesn't require a credit check or a minimum credit score. You must be:
- Aged over 18.
- Be resident in the UK.
- Buying your first home.
The issue is that Help to Buy is the equity loan proportion of the transaction - you will still need to apply to a mortgage lender for the home loan, using your Help to Buy funds as a deposit.
Therefore, you need to consider which lenders will approve your mortgage application. A lot depends on what sort of bad credit issues you have and how long ago they occurred.
Fortunately, an independent broker can identify bad credit specialist lenders even in a more serious credit scoring situation - give us a call if this applies, and we'll recommend the mortgage providers most likely to approve your loan.
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2023-05-09 
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