Own Home Scheme Pros and Cons

nig0609

they took into account the future interest payments on the ownhome element, which i feel is rediculous as anything can happen to circumstances in 5 years.

the salary multple thing is misleading. when they do affordability checks, they take your net monthly earnings and subtract all your expenses

my income is now below 18k, therefore my affordability would be low, the more you earn the more they will lend you - as you have more money to pay for similarly priced services. therefore it may result in a higher salary multiple.

thats my experience, hope it helps.

krisswilliams

I have my call in the morning... Keeping my fingers crossed. Just want them to say I eligible so I can start putting in offers and arranging the mortgage... All new to it so I hope it goes well.

tek-monkey

nig0609 wrote: »

they took into account the future interest payments on the ownhome element, which i feel is rediculous as anything can happen to circumstances in 5 years.

the salary multple thing is misleading. when they do affordability checks, they take your net monthly earnings and subtract all your expenses

my income is now below 18k, therefore my affordability would be low, the more you earn the more they will lend you - as you have more money to pay for similarly priced services. therefore it may result in a higher salary multiple.

thats my experience, hope it helps.

Thanks a lot for that. Got a viewing tomorrow, so if all goes well I can put in an offer and see what they say. At least then I'll have some actual figures, I am also after just under 4x but have a 5k loan, I do earn 22k though so may help. I dunno, can but try!

nig0609

go for it, sounds like you stand a chance. they will take the loan payments into consideration in the affordability calcs. I am buying house for xk, with yk mort, zk ownhome and wk dep

tek-monkey

See, I have no deposit to speak of. Means I'm borrowing the full whack, using the ownhome money as deposit to get the better mortgage rates. That will probably go against me I assume. I'd rather have saved a deposit first, but as they accepted me on the scheme I may as well have a go! I moved jobs a few months ago and earn a lot more now, so would only take a few more years renting to get the deposit. Still, if I buy now I don't waste the money on rent I suppose, and I'll just look at buying them out of the place once interest starts.

zoomy

As I understand it the affordability aspect is (when they make the decision) based on your "take home" income. They deduct outgoings such as council tax, utilities, any service charge, any payments on loans etc. and factor in reasonable "living expenses" to come up with what they feel you can afford to pay in mortgage each month. This is then worked back to give a maximum mortgage.

Initially the offer is based on gross salary alone which is why they often decrease what they will offer when the full calculations are done

tek-monkey

So they use my pre tax earnings to give me a guide figure, but my taxed earnings to actually calculate the mortgage?

I've just run a few sums, and after mortgage/council tax/gas/electric/water/insurance/broadband/sky/phone I am left with £470 per month from my take home wages. From this I have a £120 loan, so would have £350 for food/entertainment/repairs. This is assuming a 3 year fixed rate of 4.89%, so there may be better options out there. All I can really do is see what they say I suppose.

nig0609

tek-monkey wrote: »

So they use my pre tax earnings to give me a guide figure, but my taxed earnings to actually calculate the mortgage?

yep, bloody stoopid way of doing it in my opinion

tek-monkey

No more stupid than getting me to put an offer in before knowing what mortgage I can get!

essikapessika

Hi, hoping to get some help! I am in the process of a purchasing a property using the MyChoice homebuy scheme on my own. Its a short chain with me, the vendors and the person at the top who (mid-process changed her mind from going into rented) is now buying a new build. Originally I was meant to exhange last week with a view to complete end of this week but the woman at the top of the chain is refusing to complete until her property is built (even though she has relatives to stay with), however, my solicitor has informed the vendors that I run the risk of losing funding if i do not complete soon. This has scared (me!) but also the vendors I am buying off. The vendors estate agent rang today, initally to inform about further delays (i.e. no set completion date on new build) but he also queried the likelihood of getting an extension on funding he did this subtly... I'm so wary of estate agents that I'm wondering if he is doing this to be sneaky so he can tell the vendors that it was a scare tactic, I don't think it is I'm so confused and worried the house will fall through. Just wondering if anyone has experienced anything like this on the scheme or from estate agents? Really don't want to lose the sale, but am so worried x