Refused mortgage from Leeds on part buy part rent scheme..what next?

Yasmina

I earn £34,000

I have been offered a London new build scheme. Total cost of property - £264,000. My share would be £66,000 = 25%

"Good" credit report, a few late catalogue payments, no CCJs, all loans paid off, most credit cards paid off, one remaining with no late payments.

Steady job, no late payments for 2 years.

Leeds refused me a mortgage today.

Are they known for being strict? Should I apply thru my bank, Alliance and Leicester, would they look at me more favourably, as I have banked 10 years with them?

EDIT - Experian gave an "excellent" report, practically flawless. Equifax was more damning. I don't kow why so inconsistent??

Cannon_Fodder

Write a thankyou letter to Leeds.

Those schemes are purely to maintain inflated house prices. Pretend they are not available, tell everyone else to do the same, and just maybe we will start to see sensibly priced houses.

Think of it like this. You are struggling to get approved on 25% now, with an above average salary. What sort of salary do you think you will need to have, and how long before you have that level of salary, to be able to afford the other 75% some day, over a shorter repayment period than the first 25% ?

Unless you want to be 70 and still paying the mortgage.

uzubairu

Cannon_Fodder wrote: »

Write a thankyou letter to Leeds.

Those schemes are purely to maintain inflated house prices. Pretend they are not available, tell everyone else to do the same, and just maybe we will start to see sensibly priced houses.

Think of it like this. You are struggling to get approved on 25% now, with an above average salary. What sort of salary do you think you will need to have, and how long before you have that level of salary, to be able to afford the other 75% some day, over a shorter repayment period than the first 25% ?

Unless you want to be 70 and still paying the mortgage.

Well said.

elle.woodz

Cannon_Fodder wrote: »

Write a thankyou letter to Leeds.

Those schemes are purely to maintain inflated house prices. Pretend they are not available, tell everyone else to do the same, and just maybe we will start to see sensibly priced houses.

Think of it like this. You are struggling to get approved on 25% now, with an above average salary. What sort of salary do you think you will need to have, and how long before you have that level of salary, to be able to afford the other 75% some day, over a shorter repayment period than the first 25% ?

Unless you want to be 70 and still paying the mortgage.

The scheme is designed (in my opinion anyway) for smart people who understand that such a small mortgage repayment (probably around £300-£400) a month is designed to help you save up even though you are on the low salary (hence the limit of joint income of £60,000) and then, when you move up the career ladder (and build up some savings) continue purchasing the other chunks of your property.

I believe prices in places like London are over-inflated because of the supply and demand issues (as well as higher than average salaries) than those scheme - what percentage of Londoners part buy/part rent? Not many I guess?

As for the reports, see here: http://www.moneysavingexpert.com/loans/credit-rating-credit-score

There is no general credit score, every lender will set different criteria.

You don't risk anything by enquiring with A&L, as a general rule your bank should look more favourably as they know the way you manage your money a bit better than other banks

Good luck!

betmunch

Why did the Leeds refuse your mortgage?

If you know this then you can look at some other lenders that might be a bit more lenient with whatever issue Leeds took offence to.

Although I have to agree with Cannon Fodder and say you should avoid these schemes if you can. If you have to look at this sort of scheme the MyChoice HomeBuy is better (IMHO).

Cheers

Yasmina

Thanks everyone.

I believe the reason was 2 or 3 "late" catalogue payments.

I just phoned Woolwich, and explained this to them. They said they couldn't see an issue if it were just late catalogue payments, all paid off now in any case, as are both my loans.

I never missed a single loan payment.

Woolwich said that if I'd paid my loans late, that might explain it, but not just a couple of late catalogue payments.

Woolwich are going to assess me on the phone tomorrow.

It all seems very hit and miss to me.

AMILLIONDOLLARS

Just a point to remember, whoever gives you a mortgage may well undervalue the property, so you'll have to go back and renegotiate the price/share you'll be buying.

A lot of people don't know these types part buy/part rent schemes are still subject to a drop in property valuation. Also when you buy further shares in the future the property may increases in value, so you'd be buying your shares at the new increased valuation, so it works both ways.

AMD

Bargain_Rzl

elle.woodz wrote: »

You don't risk anything by enquiring with A&L, as a general rule your bank should look more favourably as they know the way you manage your money a bit better than other banks

Good luck!

The OP won't have any luck with A&L, regardless of having a reputation as a good customer with them. A&L do not lend on shared ownership property, at all - unless they have changed their policy recently, which seems very unlikely in the current climate.

Yasmina

Bargain_Rzl wrote: »

The OP won't have any luck with A&L, regardless of having a reputation as a good customer with them. A&L do not lend on shared ownership property, at all - unless they have changed their policy recently, which seems very unlikely in the current climate.

Thank you, yes I have found out since that you are correct. A&L don't do shared ownership mortgages, and this has not changed.

I guess it's try one of the lenders who do offer SO mortgages, (there are very few) or abandon the whole thing.

Yasmina

betmunch wrote: »

Why did the Leeds refuse your mortgage?

If you know this then you can look at some other lenders that might be a bit more lenient with whatever issue Leeds took offence to.

Although I have to agree with Cannon Fodder and say you should avoid these schemes if you can. If you have to look at this sort of scheme the MyChoice HomeBuy is better (IMHO).

Cheers

Thanks, it was a few late catalogue payments, but when I discussed these with Woolwich, they said it should not be a problem, as it's not like I have any CCJs or IVAs or anything.

robin_banks

I too was offered a shared ownership scheme, and applied to the Leeds who subsequently valued the flat £35000 less than Notting Hill Housing Association.

We pulled out, had we done our homework we'd never have bothered applying.

Shared ownership is madness.

You've had a lucky break here, the combined rent, mortgage and service charge would cripple you.