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    • dhokes
    • By dhokes 2nd Oct 17, 6:08 PM
    • 120Posts
    • 12Thanks
    dhokes
    Help to Buy application rejected
    • #1
    • 2nd Oct 17, 6:08 PM
    Help to Buy application rejected 2nd Oct 17 at 6:08 PM
    So I've been on the lookout to purchase a new build home for a while now and I was on a developer's waiting list so that I can be informed when the last two plots would become available for sale. I had kept in regular contact with the sales assistant and we seem to be on friendly terms. I also know someone else who has purchased on the development site.

    When the plots became available, I reserved a plot to purchase with the help to buy equity loan and paid a reservation fee. The plots were due to be complete in around 8 months time. I agreed with a solicitor to act for me in the purchase of the property. Also, I started the help to buy application and a mortgage application with my mortgage broker, and paid a mortgage valuation fee. I managed to submit my mortgage application in before the lenders withdrew their product and increased their rate by 0.02%.

    However, my help to buy application has been rejected as my developer doesn't currently have the funding from the Homes and Communities Agency.

    What are my options? Ideally, I'd like the sale to go through, though worse case, I guess I'd like all the money I've paid to be refunded. If I have to make another mortgage application later on, I imagine I'll have a worse rate. I feel gutted as I was sold this vision by the developers and I can't proceed because of them. I've spent money and wasted time/energy.

    Also, if the builders don't have funding for next year, why are they advertising and presumably taking reservations?!

    **Update 1**: My local Help to Buy agent has said that since the build isn't due for completion until the next financial year, my builders, or any other builders don't have the funding for Help to Buy. It would be interesting to see what other buyers in similar circumstances have been told.

    **Update 2**: I spoke to my builder's sales manager and she's going to speak to the finance director and get back to me.
    Last edited by dhokes; 03-10-2017 at 7:17 PM.
Page 1
    • Slithery
    • By Slithery 2nd Oct 17, 6:25 PM
    • 364 Posts
    • 526 Thanks
    Slithery
    • #2
    • 2nd Oct 17, 6:25 PM
    • #2
    • 2nd Oct 17, 6:25 PM
    Did you get anything in writing that they were part of the Help to Buy programme?

    If not then there's nothing you can do, they can't accept the HTB scheme. You should have checked this before spending any money on the purchase.
    Last edited by Slithery; 02-10-2017 at 6:31 PM.
    • dhokes
    • By dhokes 2nd Oct 17, 7:06 PM
    • 120 Posts
    • 12 Thanks
    dhokes
    • #3
    • 2nd Oct 17, 7:06 PM
    • #3
    • 2nd Oct 17, 7:06 PM
    Did you get anything in writing that they were part of the Help to Buy programme?

    If not then there's nothing you can do, they can't accept the HTB scheme. You should have checked this before spending any money on the purchase.
    Originally posted by Slithery
    The builders are an established firm and they advertise help to buy on their website. They also asked me whether I would use the HTB loan before I reserved a plot as well as on the reservation form.
    • moneytorques
    • By moneytorques 2nd Oct 17, 8:09 PM
    • 107 Posts
    • 39 Thanks
    moneytorques
    • #4
    • 2nd Oct 17, 8:09 PM
    • #4
    • 2nd Oct 17, 8:09 PM
    The Builders Sales Team should have been aware that the H2B Funds were maxed out for the development.
    Surely therefore as they Submit the H2B application is was only ever going to be rejected.
    I say this as having reserved in a similar fashion I had to wait for the Builders funds to be reset before they could proceed with the H2B paperwork which BTW is very rarely approved first time around, double check any reasons for non-approval, it could be more than just the Funding allocation.

    Good luck,
    • dhokes
    • By dhokes 2nd Oct 17, 8:19 PM
    • 120 Posts
    • 12 Thanks
    dhokes
    • #5
    • 2nd Oct 17, 8:19 PM
    • #5
    • 2nd Oct 17, 8:19 PM
    The Builders Sales Team should have been aware that the H2B Funds were maxed out for the development.
    Surely therefore as they Submit the H2B application is was only ever going to be rejected.
    I say this as having reserved in a similar fashion I had to wait for the Builders funds to be reset before they could proceed with the H2B paperwork which BTW is very rarely approved first time around, double check any reasons for non-approval, it could be more than just the Funding allocation.

    Good luck,
    Originally posted by moneytorques
    I submitted the application form via my mortgage broker, and not the builders.

    The reason stated in the email by my local help to buy agent to my mortgage broker stated:

    "the developer does not currently have Help to Buy funding/sufficient funding from the Homes and Communities Agency for the next financial year. We are therefore unable to accept your application."
    • kingstreet
    • By kingstreet 3rd Oct 17, 8:06 AM
    • 32,366 Posts
    • 17,376 Thanks
    kingstreet
    • #6
    • 3rd Oct 17, 8:06 AM
    • #6
    • 3rd Oct 17, 8:06 AM
    You need to wait until the developer has agreed their funding with the HCA then re-submit your PIF & Res.

    This is perfectly normal at this time of year where completions will fall into the next financial year.

    All this will do is prevent you exchanging contracts, so it's in the developer's interests to rectify this quickly.

    We have four cases for two developers in this position.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • dhokes
    • By dhokes 3rd Oct 17, 8:25 AM
    • 120 Posts
    • 12 Thanks
    dhokes
    • #7
    • 3rd Oct 17, 8:25 AM
    • #7
    • 3rd Oct 17, 8:25 AM
    You need to wait until the developer has agreed their funding with the HCA then re-submit your PIF & Res.

    This is perfectly normal at this time of year where completions will fall into the next financial year.

    All this will do is prevent you exchanging contracts, so it's in the developer's interests to rectify this quickly.

    We have four cases for two developers in this position.
    Originally posted by kingstreet
    Surely they should have told me this as Iíve already started my mortgage application and paid the valuation fee. I could lose this as well as the mortgage rate Iíve agreed with the lender.
    • SuboJvR
    • By SuboJvR 3rd Oct 17, 8:57 PM
    • 458 Posts
    • 325 Thanks
    SuboJvR
    • #8
    • 3rd Oct 17, 8:57 PM
    • #8
    • 3rd Oct 17, 8:57 PM
    Surely they should have told me this as Iíve already started my mortgage application and paid the valuation fee. I could lose this as well as the mortgage rate Iíve agreed with the lender.
    Originally posted by dhokes
    Yep they probably should have told you!! Help to Buy authority to proceed is only valid for six months I believe, so it's reasonable that your application has been declined at this point.

    I wouldn't worry too much though; I'm sure it will all work out.
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