HomeBuy Direct

mighty-scoob

Hi there

Both my partner and I have been thinking for some time that we need to get onto the property ladder but didn’t think we had even the slightest chance given that we are both on a low wage.

We have come across a scheme called HomeBuy Direct and wanted to know if anybody else has had experience with this as so far we have had a few problems

Basically the deal is that the good old government will stump up to a maximum of 15% as will the developer (so 30% in total). Then you use a broker who arranges a 70% mortgage and your away.

All sounds very good. However...

We found a new build for £129,995 with the HomeBuy option of you only needing 70%. Fab we though!! The agent then put us in contact with the broker Mortgage Talk as the people to use for HomeBuy.

Here in lies the issue, Mortgage Talk advised us (using their own calculator I may add) that we could afford to buy the property out right and so we can only have an 80%/20% split.

Our wages are:

Me - £17,500
Partner - £14,032

Mortgage Talk state that we can borrow up to £130,600.68 which I find oh so unlikely.

Anyhow, the guy said that we need a Mortgage for £104,000 and promptly sent this through to RBS (only RBS and Halifax support this scheme with no deposit) and it was promptly rejected.

Now last night I checked with Halifax as to what they would lend us on our wage (before credit scoring) and their website advised £93,562!!

If Mortgage Talk had gone ahead and sent the request for £104,000 then based on what Halifax would lend us this would also have been rejected!!

70% of the £129,995 is £90,996.60 which looks to be within what Halifax would lend and about what we feel we can both afford and what a bank would consider lending us.

Has anybody else had experience with:

- HomeBuy Direct
- Mortgage Talk

We feel a bit lost and our heads are swimming with all sorts of information We just thought that we would ask you good people for some advise.

Also, just to complicate matters more lol I’m going to call RBS to see if they will advise on how much they will lend based on our wage. If its sub £100,000 (which I bet it is) then will I have recourse to make a complaint to Mortgage Talk as they will effectively have sent an application that had no chance what so ever To be honest it all feels a little fishy when we talk to them.

Do you think Id have grounds to have that credit search wiped from my credit file? I’m quite protective over my credit score, it’s not the best in the world but it’s also not the worst

Any help will be soooooooooooooooo appreciated

A very lost Neil and Sarah

SJCJDCLSC

Hi there. It's a very good question. We are in a similar position with similar income. I contacted Natwest with our income and they advised a max mortgage for us of 103k. When we spoke to our broker yesterday (not mortgage talk) she said about HBD and advised we could get a mortgage of 112k which would be 70% of a new build house currently available. It sounds too good to be true because we didn't think we would be able to get a mortgage as high as 112k (which is 3.5x our income). We've not applied so have no idea yet whether we would be able to get it or not. Hope someone can answer your questions and help you out. My advice would be to speak to another mortgage advisor who is whole of market and has knowledge of all the FTB schemes.

mighty-scoob

Its a mine field out there

Well I'm in the middle of talking to Halifax directly (given we only really have 2 banks to choose from and 1 said no after the Broker was so enthusiastic lol).

Halifax advised that we don’t need to use a broker as they can do the HomeBuy Direct shared equity directly as we will still own 100% of the property.

Going to see what they say. If its a yes then fab :j

If its a no then I will spend the next 6 - 12 months clearing ALL of my remaining loans (not many really) and bumping my score up

babybones

Hi, my partner and i are in the final stages of buying our first home using the HOme Buy Direct scheme. I have to say, it has been, and continues to be an absolute nightmare, not least because the government agency dealing with our purchasae (Orbit First Step) don't know what they're doing, but neither does our solicitor apparently!

From what I understand of your thread we experienced a similar problem to yours.

We went to a developer about looking at a flat, that we couldn't realistically afford (having no deposit). the developer told us we could go on Home Buy Direct and get a mortgage for 70% of the purchase price, with the government and the developer each putting up 15% to make the full price. (That 30% like an interest free loan for first five years)

The developer was really good, as they wanted to sell this flat quickly, and got in touch with the government agency dealing with HBD, who dealt with our application. We got recommended New Homes Mortgage Helpline for independent financial advice. They advised us that Halifax (who are in on the HBD scheme) would give us the mortgage we needed (i.e. exactly 70% of the purchase price) and were approved lenders for the HBD scheme. Great! The govt agency at that time (not Orbit) also approved us for 70%, meaning we were entitled to the full benefit of the scheme, i.e. 30% equity loan. That agency had our file up to date and was just about to go ahead and issue the approval letters we needed, when some brainiac decides to change the govt agency responsible. So our ready to go file went into a box with 50000 other applications and was shipped to Orbit First Step, causing a massive delay.

Eventually, when our file was got around to, Orbit First Step sent us the wrong approval letter! They said we were only entitled to 20% equity loan, and had to put up the remaining 80%. Which is ridiculous considering the HBD scheme is to help people without a deposit and on low incomes get a mortgage, and everyone knows mortgage companies will lend maximum 75% LTV - Orbit were asking us for 80%. So I had to telephone the guy in Orbit and basically explain his job to him, at which point he agreed I was right, and said he would get the correct letter out to me immediately. Unfortunately for us, "immediately" to Orbit really means "in about a month or a half" - another unreasonable and unjustified delay.

Nobody knows what the hell they are doing with HBD. I appreciate that it is a new scheme, but is it too much to ask for people to be trained properly before they are asked to do a job!

I would get in contact with the government agency involved - explain to them your predicament: This scheme is aimed at people like you, with no deposit and moderate income. Mortgage companies won't lend more than 75% of the value of property, so it is ridiculous of them to ask you to get a mortgage for 80%. Complain, complain and complain again - in my experience its the only way to get through to them.


This whole process has been fraught with delay and confusion; because the scheme is relatively new no one has a clue what they're doing! Without the delays my partner and I could have been in our new house 2-3 months ago, but instead we have had to keep renting (incidentally our rent is more than our mortgage would be, so we are financially suffering as a result of the incompetence of others!)

It seems we are nearly finally there, but I thought we were nearly there 4 months ago. Our file was completely ready when it was sent to Orbit, in April, and somehow they have manage to mess us around since then.

StephyB90

Hiya i was just wondering is anyone aware if there is a limit to the amout of bedrooms you can have on this scheme...? i know there is on own home and mychoice homebuy but wasnt sure about homebuy direct
Thankyou
Stephy

babybones

hi - yes there is a limit to bedrooms on Home Buy Direct.

myself and my partner are just a couple, so we're only allowed a place with max 2 bedrooms.

It depends on your circumstances, how many children you have etc.

gilly85

It is possible that if you can argue you need a third bedroom as a study because you need to work from home some of the time they will allow you to get an extra bedroom.

rosspwilliams

Hi all,

Along with the Ownhome scheme, my girlfriend and I have seen a new build that we are interested that comes under the Homebuild Direct scheme.

Before we apply, I just have a query re my credit rating, and being accepted on this scheme. By the time we will be looking to apply - September time probably - I will have cleared my credit report of any debt other than a small credit card (under £1k with no missed payments), and an overdraft of £1.5k (which I have started to reduce of late). The problem is my debts of a few years ago, when I was alot more carefree than I am now!

The report will show a lot of defaults and missed payments from years ago which have all been settled (or will be by then). Will the mortgage companies take the fact that they are all paid into account, or will they be put off by my history? I am now earning around double what I was earning at the time I got myself into a mess.

Would it be an idea to actually take a copy of my credit reports with me to the interviews etc, to show that the amounts where paid off, just to give them an idea of what I have done to improve it recently?

When I last checked my score on creditexpert, it was either poor, or very poor which isn't good obviously but I currently have a CCJ on there that will be paid off within the next 2 months. Would it improve when this has been paid? After that, like I said, the only outstanding debt would be my cc and the overdraft.

Any help appreciated.

Thanks, Ross.

gemma7wayne

So there are others experiencing this madness i have had nothing but trouble with this scheme i got acepted onto register for homebuy direct was put in touch with a mortgage company called meridian their financial advisor knew all our history including my husbands bankruptcy which he has been discharged from 6 years jan 2010 and said on an encome of 32k your intitled to full 30% and can borrow upto 190k.

She said bankruptcy would not be an issue and rbs accepted them no problem which was untrue we were declined i called rbs to be told we dont accept discharge bankrupts anymore even if it was 30 years ago she applied twice so now on credit report we have 2 declined mortgage applications can anything be done about this? because surely as an advisor she should know what she is doing.

Also she told us halifax wouldnt accept us but on calling halifax they said they wouldnt say no because of bankruptcy they would look at the whole picture/score.

I called home2own who gave me a list of advisors i could call instead of her o called them all and they all said halifax all said we could borrow upto 190k but 1 smart one advised us to wait 6 months 2 let r credit rebuild which is what we shall do and hopefully there will still be houses available on this scheme - im told its running 2 years in my area.

mighty-scoob

gemma7wayne wrote: »

So there are others experiencing this madness i have had nothing but trouble with this scheme i got acepted onto register for homebuy direct was put in touch with a mortgage company called meridian their financial advisor knew all our history including my husbands bankruptcy which he has been discharged from 6 years jan 2010 and said on an encome of 32k your intitled to full 30% and can borrow upto 190k.

She said bankruptcy would not be an issue and rbs accepted them no problem which was untrue we were declined i called rbs to be told we dont accept discharge bankrupts anymore even if it was 30 years ago she applied twice so now on credit report we have 2 declined mortgage applications can anything be done about this? because surely as an advisor she should know what she is doing.

Also she told us halifax wouldnt accept us but on calling halifax they said they wouldnt say no because of bankruptcy they would look at the whole picture/score.

I called home2own who gave me a list of advisors i could call instead of her o called them all and they all said halifax all said we could borrow upto 190k but 1 smart one advised us to wait 6 months 2 let r credit rebuild which is what we shall do and hopefully there will still be houses available on this scheme - im told its running 2 years in my area.

Oh this sounds all to familiar!

As I say in my first post we came across the HomeBuy Direct scheme and thought FAB!! And it is, provided you talk to the right people and really stand your ground with the split that is offered.

As it stands me and my partner will have to wait for 6 months now as we have had 2 declined applications, but this is more to do with my credit score only being 719 out of 999 than anything else - Have now paid off ALL of my debts, including some bad, to the tune of about £3,600 so if I can keep in the clear we should be good to go as I have no CCJ, just the odd late payment.

Here is some information that you guys may find invaluable though:

1) When you get your acceptance letter advising you are eligible for HomeBuy Direct, don’t be afraid to give them a call if a broker then tells you that you cant have the 30/70 split and must have a 20/80 one.

I called the HomeBuy Direct office in my area as we couldn’t afford the 20/80 split and they advised that they have the final say and not the broker. We got them to meet us half way and agree a 25/75 split (subject to seeing our affordability projection). Result...well it would have been lol

2) YOU DONT HAVE TO USE A BROKER FOR HOMEBUY DIRECT!!!

I spoke to a mortgage advisor from Halifax (very nice chap) who advised that you can deal direct for shared equity schemes. All you need to do is give the Mortgage Promise document they give you (showing that they will lend you the cash) to the HomeBuy Direct people. Job done


I hope at least one person finds this information useful. As for us, its just a shame that I had a few late payments in my past and still had a few “bad debts” lol. Fingers crossed thought it will all start to get better now that I am debt free. Just need to remember to clear any credit card balance I get each month!!

A BIG THANK YOU to everybody who posted in reply to my original question :beer:

Best of luck to the rest of you!!!

JoanneH80

Hi there

Just wanted to wish everyone luck with this scheme. We are at the very early stages of this process and (touch wood) so far it seems to be going ok. We went to the homebuilders and found a property we would like and then the very helpful sales person gave us info RE the scheme and who to contact etc, as well as solicitors who have done applications under this scheme. We have the IFA coming tomorrow to do the full mort application, so keeping everything crossed that we don't start to suffer the same problems that you guys are reporting.
I will let you all know how it goes.
Fingers crossed everyone
J