Own Home Scheme Pros and Cons

superfran_uk

katelu wrote: »

I have been approved for the loan section of the scheme and started the ball rolling on the mortgage part today. However my application was "referred" rather than accepted and just wondered if this happened to anyone else? The mortgage advisor said it was probably just a formality to check I could keep the repayments up (I will be able to do this easily as my mortgage will be 2/3rds of what I pay now in rent!) I'm sure its probably due to my outstanding debts, but I have been completely upto date with repayments etc for the past 2 years with only 1 late payment in that time.

Hope I'm just getting in a "tizz" about nothing but just wondered if anyone else had experienced the same?

I have not heard of this happening, but I agree it probably is to do with your debts. When they say they want to check you can afford it, what they really mean is check they want to lend to you - with debts, and particulalry a history of any late payment, you may not be the ideal candidate for a mortgage at the moment. Fingers crossed you should be ok (you weren't rejected outright, which isobviously good news!) but if they do say no, head over to the DFW board so next time you'll be in a much better position!

Giraffeseeker

katelu wrote: »

I have been approved for the loan section of the scheme and started the ball rolling on the mortgage part today. However my application was "referred" rather than accepted and just wondered if this happened to anyone else? The mortgage advisor said it was probably just a formality to check I could keep the repayments up (I will be able to do this easily as my mortgage will be 2/3rds of what I pay now in rent!) I'm sure its probably due to my outstanding debts, but I have been completely upto date with repayments etc for the past 2 years with only 1 late payment in that time.

Hope I'm just getting in a "tizz" about nothing but just wondered if anyone else had experienced the same?

Don't worry, it's normal and happens to lots of people. All it means is that a "real" person will look at your application rather than the computer saying yes. Anything on your credit report could refer you, however minor, it does not mean you won't get the mortgage, just adds a couple of days onto the process. My application was refered but I was accepted fine a few days later. I've read other people on here having the same issue with Co-op, but haven't heard of anyone actually being rejected.

katelu

Thanks Tintingirl, Just what I needed to hear! The co-op advisor did say to go ahead and put an offer in on the property we like so he must feel reasonably confident it will all be okay (we did put the offer in and it was declined, so have put a second offer in which the ea agent said he would agree too and he would tell her to agree to!). As a first time buyer this is seriously stressful!!

rngeena

Actually gave the same question as ladybird3. What is this 10% deposit. I am any putting any deposit from my side so could it really a problem at the time of exchange since the ownhome will release the fund 10days after the exchange and can no actually get any funds from them on the exchange date. If anyone who has actually been through the process til end can answere this that will be great.
Thanks

ladybird3 wrote: »

Interview on friday so hoping to start looking for somewhere next week, just wondering if anyone who has gone through the scheme to completion can give me some advice on the deposit etc? Seen a couple of threads saying that Ownhome dont release the funds until much later than would normally be expected in a purchase, there are some new build developments near where I live which I may look at however they all seem to ask for a 10% deposit on exchange then the rest of the money on completion-would ownhome release 10% of the funds for this? I wouldnt have that kind of money sat around otherwise! Thanks

katelu

Well co-op got back to me and offered me a mortgate of ... £54K:mad: That means I have 98k to buy a 3 bed house where I live which is frankly impossible. I asked why and my credit check was absolutely fine but their affordability calculator said 54k (even with my rent at 1/3 more than my mortgage repayments AND the loan repayments would be). I am going to appeal there decision and am gathering all the info I can together. On a positive note I also got £3100 ppi awarded today so I am going to use that towards my debts (obviously) and so hopefully make my "affordability" factor better. Also got a pay rise today so hope that helps too.

Really upset to be honest because I'm not asking for a ridiculous amount of money and am also totally realistic about what I could buy on this scheme. Just hope I can get a bit further on appeal. Any advice would be greatly welcomed.

McGoo

It depends how much you earn. If you're on £20k a year, an offer of £54k would be more then reasonable considering you currently owe close to £16k.

You say you can afford the payments but what happens if interest rates shoot up. Even if you are on a fixed rate, it is impossible to tell what rates will be at the end of your fix. Could you afford repayments if the interest rate is say, 10%? How about repaying the capital from Ownhome? Also, without wishing to be rude, your signature suggests you can't afford your current situation. If I was a mortgage lender, I would run a mile from someone who owes more then £10k on credit cards and an overdraft.

If I was in your position,I would do everything possible to reduce my debt before considering a house purchase. Sorry if this is disappointing but I think you should take a step back and rethink.

le456

wasteNot wrote: »

Ok yes I apologise for being greedy.

But what about the equity question? Suppose with your monthly payments you pay off the mortgage and some of the lets say 25% equity loan, would Ownhome still be entitled to 25% of equity, even if you had reduced their share to say, 20%?
QUOTE]

We have just signed up and are awaiting our phone interview, they said approx 8weeks wait. I did ask them how the re-payments work if we wish to buy back the % they own and this is what i was told:

~You can buy back your propery in minimum of 5% increments (that's 5% of the property value not the loan amount) or more.

~Each time you wish to purchase back a percentage of the property you will need to get the property re-valued as your purchasing back the property at property value not at the loan amount you borrowed (and they choose who re-values your property so make sure you have extra £££ ready)

~The interest payments are on the loan not the property % that is owned by the scheme (which is a good thing when the market rises again) These payments in no way reduce the amount owned by the scheme.

Hope this helps

superfran_uk

katelu wrote: »

Well co-op got back to me and offered me a mortgate of ... £54K:mad: That means I have 98k to buy a 3 bed house where I live which is frankly impossible. I asked why and my credit check was absolutely fine but their affordability calculator said 54k (even with my rent at 1/3 more than my mortgage repayments AND the loan repayments would be). I am going to appeal there decision and am gathering all the info I can together. On a positive note I also got £3100 ppi awarded today so I am going to use that towards my debts (obviously) and so hopefully make my "affordability" factor better. Also got a pay rise today so hope that helps too.

Really upset to be honest because I'm not asking for a ridiculous amount of money and am also totally realistic about what I could buy on this scheme. Just hope I can get a bit further on appeal. Any advice would be greatly welcomed.

54k sounds entirely reasonable for a single wage with debts, what is your motive behind appealing? I didn't know you could appeal against a mortgage lender for not wanting to lend to you, and even if you can I can't imagine you will get far with it TBH.

You have no deposit, debts, and I would assume that you don't have a very high wage, if you can sort out at least two of those three you'll be in a much better position. As it is, I'm sorry to say it, but I don't think you should have raised your expectations too high.

coffeedog

Hi all,

Just called ownhome as have been waiting exactly 8 weeks for a letter. I've had post go missing recently and wanted to check their letter wasn't one of them!

They said it's taking a lot longer than they originally anticipated and that 10 weeks is far nearer the mark now. I was advised I'd get a letter probably around beg-mid july. I'm in west cornwall.

Jsut thought i'd let people know the latest with waiting times.

It's quite good for me as it allows some stuff to come off my credit report that i've shut down but still - the wait is the worst.;)

katelu

My hopes were only raised because I was told by the person processing the application that I should be able to get a mortgage for around £110k and that as I was asking for the mortgage over 25 years that they may ask for it to go over 30 yrs instead. I would have completely understood if they had asked me to put it over a longer term or reduced the amount I can borrow by the amount I owe in debts. My debts are a result of supporting my husband when he was unemployed for a long period of time and in the last 7 months since we seperated I have paid off over 12k because I have to disposable income to do so. For the mortgage interest payment I can prove that I could still keep up payments even if they doubled so to reduce the amount they can lend due to affordability is just hocum!

I am however now concentrating on clearing my debts further before appealing the decision (and of course I don't have a deposit else I wouldn't be applying for this scheme!)