Own Home Scheme Pros and Cons

zoomy

Ladybird3 as long as your old loan isn't that big and your take home pay matches up to your salary (ie. you aren't heavily taxed on company car, fuel, healthcare etc.) then I wouldn't worry.

My agreeement in principal was £111k but when it came down to it I was only offered £68Kdue to my low take home. However, if co-op won't meet the minimum mortgage set by own home then it doesn't disqualify you - own home will reduce their minimum to match the co-ops offer. Fine providing you can make up the shortfall in mortgage...

Katelu - I applied before Christmas and had my interview in late May - I think the wait is dependant upon application levels in the area you want. I would anticipate that the scheme will have had more publicity by next year and the wait will be longer... If you talk to ownhome will they not role on your current approval?

ladybird3

Right well I have just spoken to the co-op and want to relay a warning to everyone! I was originally told that I could borrow £115k in principle so 4.5x my income but in the end only needed to borrow £104k due to the price of the property i was buying.

The co-op today have informed me that due to 'affordability assessment' they will only lend me £87,100 so 3.5x my income giving me a shortfall of a whopping £17, 870.:eek: I asked them why and they couldnt elaborate any further for me other than assessing my affordability. Just to paint a picture for you all my situation is this, I am a nurse(secure job!) working in central london and currently I earn a good salary of almost £26k, I have one debt which is a monthly loan that I pay on time and other than that I am not in debt, no credit cards, no store cards, no huge overdraft, nada! not even a student loan. I am being paid this year to undertake a 1 year course which will enable me on completion to move up a pay band giving me an annual income of around £31k. And nope i have no dependants. Despite the co-op having all that information they still werent willing to lend me the full amount, im not sure how squeaky clean you have to be to get the 4.5x multiple but I suppose looking at it they're going back to the days of old in lending people smaller multiples as used to be the case. Im sure if i didnt have a loan that would have made a small difference but given my lack of other debts I cant think it would have been that much.

The funny thing is that the amount they have said they will lend me means my monthly replayments will be nearly £100 LESS than im paying now in rent.:T

I am in a very very extremley fortuante situation in that the elders of my tribe have decided they will help out providing a deposit to cover the shortfall and I will use the money that I would have used if I had the higher monthly payments to gradually repay them.:o

But I just really wanted to use this as a warning to people that even if you think you're very stable and solvent you may not get the full 4.5x multiple. It would almost be worth ignoring the co-op and basing your calculations for what property you can find on 3.5x in order to avoid potential dissapointment. That said I have seen a post on here stating the co-op would only lend them 2.5x so they're clearly being quite strict.

Make sure you check the mimimum amount places for people said you had to get aswell, for me it was £82k so with my £87 im only just over their eligibility criteria. Complete stress I have to say but I am aware that Im in a lucky (thats all it is!) situation
Good luck everyone:o

superfran_uk

Well that's great news (in that you can now get somewhere!) but also a good warning for others.

It's a shame for those who, unlike you, do not have other revenue streams to make up the shortfall (e.g. Katelu) because for them it does mean they are disqualified automatically, but unfortunately I could see it coming... Our mortgage was LESS than 3 x salary - which was luckily ok for us as we are on 50k combined and could not afford the repayments on much more than 3 x on a monthly basis - but looks like they're being just as stingy with single incomes. But warning people about this possibility has got me in trouble with several posters, so it's good to have a first hand account!

Good luck with it all!

ladybird3

Yep I think its virtually impossible if there isnt help at hand-especially if you're buying in a more expensive area as I am (London) but agree I'm in a fortunate situation. For those that are considering going on the scheme it would be wise to save up as much as you can just so you do have a little pot to cover any shortfalls that may occur. That is much harder if you're a single applicant as I am but I suppose it's the only way. My partner and I did look at possibly doing a joint income but didnt think he would be looked to favorably upon due to his income (he is a music producer and technically self employed) hence why I applied alone

Hopefully everything will be ok now, just have the reality of being £200,000 in debt which actually makes me feel a little bit sick when i write it down.

superfran_uk

ladybird3 wrote: »

Hopefully everything will be ok now, just have the reality of being £200,000 in debt which actually makes me feel a little bit sick when i write it down.

Haha yes, makes my tummy do a little flop as well!

We only paid a very small deposit - couple of grand - to make the mortgage up, but yes, would certainly advise people to save save save!

katelu

:Tladybird for getting it all sorted (even if you did need a little help from your family). I am now pretty much resigned to waiting another year but am going to appeal anyway (you never know!) Just such a shame when my mortgage payments would have been so much less than my rent is now but I do have a good roof over my head and so will just hunker down to get those debts gone and restart next year.

ladybird3

Thanks everyone! yeh it must be very very frustrating but it sounds like you're well on the way and plus at least you're making a huge effort to deal with your debts rather than just ignore them
Had the mortgage agreement through now plus the solicitors stuff so just waiting for a survey date
In the meantime it's off to ikea to look at a few kitchens!
How is everyone else getting on?

superfran_uk

Completing a week tomorrow... getting very excited and nervous etc, I know it will all be fine but I'm even starting to DREAM about mortgages, insurance etc etc!

Have started packing, bought a LOT of cleaning supplies and paint for the new house. Got all the tools we'll need (hopefully!) ready to go. Booked the van for three days after completion. Made a list of all suppliers I have to contact, got ourselves building/contents and mortgage protection, hopefully I've thought of everything! Can anyone think of something I've missed?!

ladybird3

redirect your mail!

superfran_uk

ladybird3 wrote: »

redirect your mail!

Thanks! It's now on the list!