Own Home Scheme Pros and Cons

sontoon

Thank you again superfran and ladybird, You two are brilliant.

We have realised the process is a long one, seems a long time since March when we initially started the process. We have a handful of properties saved on rightmove to go and have a look at if we get the go ahead and I have been number crunching for what seems forever lol. I have been working it all out on 2.5 our joint salary from what you have all been saying.

I must admit I thought that when the AIP was done all the credit checks were done at the same time as we had to supply all of our documentation at the time and it was an application that wasn't able to be done online. Oh well you live and learn. We have two credit agreements on for a car and one that will be ending in october and all have been paid on time with no arrears etc.

Will let you know how we get on and hopefully fingers crossed will hear soon as like I said will be 16 weeks this friday. Thank you again

superfran_uk

rngeena wrote: »

hello everyone.
I have a question which i really hope to get an answere. I have passed the ownhome criteria and based on where i live they have given me a maximum value for the property that i can buy which is 240000. I have now found a place which is around 7 miles away from where i live and the property price is 250000. The maximum that i can lend from co op 4.5 * my salary is 152000 which means that in theory i can afford to by this place.
I have a permanent job with no debts. Does anyone know how series the ownhome are about this maximum limit. Can i buy something which is 10000 high in what the maximum value they have quoted.Any anwere will really be appreciated.

No, they are (quite rightly) very strict on their criteria. However if you were to put in an offer of, say 225 (10% below asking), and build up to a maximum of 240, this would be acceptable. It is worked out on what you pay, not the asking price. If they don't accept that, you will have to walk away.

You would also be very fortunate to received 4.5 x salary as a mortgage. Have you had your mortgage offer through? If not I would be very cautious as to this and work on a more conservative multiple - as explained throughout this thread, they are lending the least they can. My partner and I received about 2.5 x salary with good credit ratings, and some single people buying have received 2.5-3 x but no more.

superfran_uk

sontoon wrote: »

Thank you again superfran and ladybird, You two are brilliant.

We have realised the process is a long one, seems a long time since March when we initially started the process. We have a handful of properties saved on rightmove to go and have a look at if we get the go ahead and I have been number crunching for what seems forever lol. I have been working it all out on 2.5 our joint salary from what you have all been saying.

I must admit I thought that when the AIP was done all the credit checks were done at the same time as we had to supply all of our documentation at the time and it was an application that wasn't able to be done online. Oh well you live and learn. We have two credit agreements on for a car and one that will be ending in october and all have been paid on time with no arrears etc.

Will let you know how we get on and hopefully fingers crossed will hear soon as like I said will be 16 weeks this friday. Thank you again

Good luck :money: You seem to have realistic expectations of what you will get, so I don't forsee any huge problems for you (not that it counts for anything, but if you have been following this thread you will probably know what I mean!). Please come back when you hear something and let us know how you get on!

rngeena

thanks superfran_uk for the answere. You are actually right they are quite strict. I called the ownhome and they told me that this is my limit and cant go above that. I have already made an offer for 240000 but the owner will not accpet.
I have already had my mortgage offer throught and it seems like they have no problem in giving me 4.5 times my salary, the problem here seems to be ownhome because they not allowing me to buy 10000 more than the quoted value.

superfran_uk wrote: »

No, they are (quite rightly) very strict on their criteria. However if you were to put in an offer of, say 225 (10% below asking), and build up to a maximum of 240, this would be acceptable. It is worked out on what you pay, not the asking price. If they don't accept that, you will have to walk away.

You would also be very fortunate to received 4.5 x salary as a mortgage. Have you had your mortgage offer through? If not I would be very cautious as to this and work on a more conservative multiple - as explained throughout this thread, they are lending the least they can. My partner and I received about 2.5 x salary with good credit ratings, and some single people buying have received 2.5-3 x but no more.

ladybird3

Great that you have your mortgage sorted for 4.5x! In all honesty if a vendor is not willing to accept 240k on a property thats on for 250k then he has his head in the clouds and you should just walk away.
Pre recession it was standard to start negotiations at around 10% below anyway and then work up but in todays climate some are saying that 15% is nearer the mark

You're the one with the money in your pocket so I would be tempted if you want the property that badly to just say to the agent that the offer is there if the vendor wants to reconsider so take it or leave it. It's all very well estate agents saying the housing market is on the up etc etc but of course they're going to massively over inflate any figures-they're on commision and it's in their interests to keep prices high!

The reality however is regardless of the supposed increase in interest in the market interest alone does not equate to sales and the economy is absolutely on it's !!!!. Yes interest may pick up but if unemployment continues to rise then that will naturally have a negative effect on the housing market-really dont think we have seen the end of the economic crisis! So dont be bullied by estate agents telling you you wont be able to get a bargain or vendor's unwillingness to budge on their prices, eventually they will have to because it is just unrealistic at the moment. If the financial standards authority go through with the recently discussed proposal of limiting banks to lending 2.5x income multiples to people then prices will have to drop further or the market will come to a total standstill.
The possibility of getting a a 250k house will be zero because lets face it how many people earn £100k or more?!
Many people including me have felt the bank's pinch on how much they will lend you at the moment

Anwyay that is all speculation I appreciate but still dont pay over the odds for somewhere!

One more thing, if anyone is looking at options other than ownhome i recently came across a really fantastic monthly magazine that outlines every possible buying option and has some good advice in, it's called First Time Buyer and is available from big branches of wh smiths and borders bookstore-I've found it to be very useful.

everything has been sent to the bank and the solicitors so I think perhaps I now play the waiting game. . . . . :j

geekinaseat

Hi there everyone, I'm on the waiting list for an ownhome appointment so fingers crossed I'll be applying for a cooperative mortgage at some point in the (distant?) future. I have a question that someone who has been through the process may be able to answer, I am paid my salary (30k) and I am also on call for work and get paid per call, these add up to a significant amount (about £400-700) a month.

Is this taken into account in the mortgage application? I am worried that the amount that the co-op will lend me wont be enough for a flat in my area even with the ownhome loan as it is very expensive. Rightly or wrongly I am also using pessimistic figures (2.5x multiplier and taking off the monthly repayments for my car loan off my salary before the multiplier etc). Has anyone else declared any "variable" extras to their salary and had them taken into account?

ladybird3

Can I ask where you're thinking of buying?

superfran_uk

Oh my word, was packing away all the details today, ready for the move and had a piece of paper dated DECEMBER - that was when I originally applied! I have not missed a beat at all, we went straight from being accepted to putting an offer to booking survey to buying, and it still took 7 months! Be warned people, this is not a quick process.

I don't believe bonuses/overtime are usually taken into account but you may wish to query this with the co-op. Also if you are buying as a single person and you have a good credit history, you may well get a good multiple.

ladybird3

superfran how long did it take from you sending in your id to the co-op to them arranging a survey and then sending back the final offer?
I seem to be at the stage now where I've done everything from my end and now it's all in the hands of the solicitors and bank! Rightly or wrongly im hoping things wont take too long (survey results pending!!) as im not in a chain and neither are the vendors, we shall see anyway!

Maseillo

Wow reading through some of the posts on here the process seems to be dragging out a long time. We bought our house with ownhome. We had our phone interview on 17th September (rang up for an appointment about 4 weeks before that), We went viewing straight away, put an offer in within a week, and moved in on 1st December. So bit of a whirlwind really! Anyway just wanted to show that there is an end to it eventually for those that are having a long wait. I think we were really lucky. We were also really lucky that a few weeks after we moved in we got a letter through the post with a cheque for £1500 as they had been given some money to give to people who had completed before a certain date.

I hope that it all works out for everyone!

SJ x