Own Home Scheme Pros and Cons

wildgill

superfran_uk wrote: »

Earning a million quid a a year does not protect a person from anything, but it's surely a better place to start from than struggling from the word go?

On our joint income, we should be able to save enough while paying the mortgage to cope for a while in case that ever happens, although we could technically live on one wage for a while if need be. It wouldn't be fun, but it would be manageable.

I think the point I am trying to make is as tek_monkey made above far more succinctly - yes everyone has the right to buy a home, if they can afford it. I have only decided that I can afford it very recently, and I am very surprised that someone on a joint income of 15k would think they could. I would like to know how!

The upshot is if you earn 15 or 50k the mortgage lender will only lend you 2.5 (sake of saying) times your disposible income, therefore at the end of the day we will all borrow 2.5 times this amount. Then we will all have the same shot at making our mortgage payments.

The fact is private rents far exceed what most mortgage payments could be and if you chose a 5 year fixed rate it would be easy to budget for that period of time also taking the opportunity to find yourself a dream job. No, its not ideal but perhaps we called all live at home with mum and dad until we have a hefty deposit, put off having a family, put of having a life until we could earn an income accetable to some on this forum.

At the end of the day it will be up to the Lender and although theyre not infallible they are the ones lending the money.

ladybird3

I am just going through the Ownhome process at the moment and am at the stage of viewing properties and putting in a few offers. Just wanted to add to the threads of affordability as it seems to have become quite heated!

Essentially if someone fits the criteria set by ownhome then they will be accepted regardless of if they earn 15k or 50k. The mortgage side of it is a bit different though, firsty if you're buying as a single applicant then the co-op will lend you UP TO 4.5x your income, but if you're a joint applicant then they will only lend 3-3.5x. With regards to whether you think you can afford to keep up with a mortgage the hard fact is the co-op really dont care. What they need to know is how much of a risk you are to them and how likely it is that you'll be able to pay them back your money.
I have been told by the Co-op that once they have worked out how much they could potentially lend you they will then look closely at all your bank history and credit history, they take into account your outgoings and potential outgoings associated with the cost of being a home owner eg gas, electric, council tax, building insurance (or service charge if you're leasehold) and contents insurance. They then use a program to work this out as a percentage and basically you have to be left with a certain percentage of your net income at the end of each month to be able to afford the mortgage and be able to live aswell (in their opinion). I dont know what this magic percentage is but this is just what the co-op told me!

Clearly the lower the income the less money you will have left at the end of the month in order to generally live off and if the co-op dont think this is enough, regardless of whether you do, you will not qualify for a mortgage.
The co-op will also be concerned with what type of job you have and your employment history. They want to see that your job is secure and that you're not in a probationary period at work. If you have had several different jobs over a short period you will be seen as a risk.

I think perhaps the point that superfran is making is that although, yes the scheme is for first time buyers and keyworkers, it is not going to be a quick fix for everyone, and that im sure we all are constantly thinking of ways to better our income and job prospects.
The scheme is not marketed as being for 'lower incomes', its for those people who cant get a foot on the ladder due to a massively over inflated houseing market, despite being on an average or above income-hence why it helps people who earn up to 60k. In fact its those people who are on middle incomes who sometimes (sometimes not all the time!) struggle the most with suitable housing options. I am in a situation where I dont qualify for any kind of social housing help but dont earn enough to buy a property near where I currently live and work.
I am not saying by any stretch that if you're on a lower income or living in social housing you shouldnt have the opportunity to buy but thats exactly why councils and housing associations have right to buy schemes and offer properties at much lower rents-Ownhome is not a right to buy scheme.

Playboy999

ladybird3 - I have been following your posts for a while as my partner is going through the interview process on Friday and have to say you have provided us with fantastic information about this scheme and reading your replies has answered so many of our questions. This site is brilliant - i don't know where i'd be without it. :T

ladybird3

Really glad you're finding the information useful!
I just found that when I started going through this process there were so many questions I needed answering but not enough information provided on the ownhome website so personally for me this forum has really helped. Hoped that by putting my experiences on here it would dispell a few myths and provide some useful facts
Good luck to everyone whos applying!:beer:

rosspwilliams

Thats a great post ladybird, thanks. Just forwarded it onto my gf, as we will be applying for ownhome at the beginning of next year.

It's great to hear other peoples experience of it, rather than reading what they are trying to sell you in a brochure.

superfran_uk

That's a great post, really informative and 100% accurate. You are so right in saying that it is not a right to buy scheme, it is not targeted at low incomes - it is a scheme for 'inbetweeners' l(ike you and I) that do not qualify for benefits and council houses, but could never do it otherwise.

It seems that some people have taken offence to my comments, but as I have said all the way through this whole thread - you must be realistic. The co-op are quite strict about what they will and won't accept, and it is so disappointing not to be accepted, particulalry for those that started viewing already. Your post explains their criteria perfectly. Thanks.

superfran_uk

paperab wrote: »

Every room at 2nd or 1st floor is considered a bedroom (even an additional bathroom) because (do you remember?) there was a dispute with the introduction of the HIP for homes for less than 4 and 3 bedrooms. Someone argue that where you can fit a bed then this is a bedroom.... but this is simply not TRUE or it was true only for home information pack matter.

So the surveyors are in the same position of everyone: who knows ? A room in the loft whit half part unusable because not high enough is still a bedroom ??

In any case, please kindly understand, a ROLE, based on surveyor OPINION is not a role it's a stupid joke (what happens if the surveyor is my friend ???).

I think GB deserve a better legislation then....

To be honest I have no idea what you are talking about re: the HIP and I'm not sure whether your comments are questions or rhetorical - but from what I have been told by Ownhome and also what I have read here, if Countrywide Surveyors (the co-op's chosen homebuyer report - you won't have a choice in this) say it's a bedroom, then that's what it is.

If the two-storey house you want to buy has an extra room upstairs that is big enough to fit a bed in, then the surveyor will probably say it's a bedroom, and if they do this then OwnHome will not give you the funding - there is no room for discussion. Yes it's a pain but at the end of the day, you just have to play by their rules as they're the ones with the money

charliecj

Hi, I'm not sure if anyone can help but I'm trying to find out a bit more about the ownhome process. I have applied through the ownhome scheme, but they don't seem to be too forthcoming with information so I was hoping that someone else who has already been through it would be able to help.

Currently I have been offered the ownhome loan and mortgage through cooperative, have sent off my signed mortgage offer to coop as well as identity documents and proof of income (although I already had to provide proof of income for the underwriters to get this far). I am awaiting a case worker being assigned by coop but am unsure if I need to provide anything else to ownhome. Do they also need proof of income or do they take coop's 'word for it'? I was told by one person I spoke to at ownhome that they require my payslips etc as my application is close to the £60000 limit but I was then told by another representative that this was not the case. Do coop send on payslips etc to ownhome or have I just been misinformed regarding this?

I'm rambling a bit but getting frustrated with the process..coop sent us the wrong forms to sign 4 times and before that we waited 3 weeks for an underwriters decision...I have the vendors estate agent on my back as a result!

Thanks in advance to any replys!

superfran_uk

I have never send any docs to Ownhome. I sent loads to Co-op though, and they managed to lose them on some guy's desk for a while...

ladybird3

Hmmmm i wouldnt know about the forms of ID etc as not quite at that stage yet!

Very excited as had an offer accepted on a flat today and means I need a mortgage for 10k lower than the co-op orginally said they would lend me
Was a bit worried as when i rang the co-op they went through the whole application and then said the mortgage has been referred, they seemed to think this was a fairly standard thing at the moment though and just said it means underwriters look at it instead of a computer so fingers crossed it will all be ok

Told i should have a decision from them in 2 or 3 days however reading the last couple of posts im now wondering how realistic that is?!!