will nobody help us?

weesie81

sorry but i need to vent this out after my 4th phonecall to different lenders all singing from the same hymn sheet of we cannot lend to you or we can only lend £7k or £23k

we have aplied to a scheme called LIFT which is an open market shared equity scheme in scotland. (takes cover while whole board slates this)
we have 3 small children at home 5 and under so i stay home to look after them and my husband works full time
between his salary and tax credits we have £21-22k a year income
we have a personal loan for car at £264 a month and a next directory account thats it.

we pay £650 pcm to live in the village i was born and brought up in,my children go to school here and i care for my elderly gran who is 80 so moving out the area is not an option.

we have no deposit and quite frankly have no way of saving one whilst we are paying the rent.
we live within our means and pay everything on time every month.
here is the hard part why can we not get a mortgage for 80,000 where our payments would be less than our current rent?
i understand we are a risk due to just one of us working but surely that is what these payment protection plans are for the worst case scenarios of redundancy illness etc?

i am so frustrated and social housing is not an option as i said its a small village and the local authority has sold majority of its stock.

how can a scheme call itself LIFT when we cannot even get on it? they are potentially offering to put down deposit of 20-40% on our behalf yet no lenders will entertain us
how can we get approved for scheme if we cannot even obtain 3 lenders quotes?

Conrad

weesie - over the last few years the great British public has vented it's disgust at lenders lending people too much. In any pub you will likely hear conversations in which this point is made - "it's discusting lending to people that are already over committed" etc.

Now when someone is trying to get a mortgage they can always afford it in thier eyes.

But, when things go wrong, they claim the exact opposite in court, stating they should never have loaned to.

Lenders cannot win.
They are now acting responsibly, yet many are now complaining they cant obtain finance.

You cite insurance, but that's an irrelevance as often these policies are lapsed as the holder fails to keep up premiums and claiming can be difficult anyway.

You have 3 children, one modest income and a hefty car loan. I don't wish to be too blunt and spikey here, but from a lending point of view that is a risky cocktail.

Why do I say it's risky, afterall you are paying more in rent!!

Lenders need to consider the bigger picture.
Typically when people get into arrears it's because they have no margin. Thier car breaks, the dog is ill and the roof blows off all at once. It wouldn't take much to tip you into arrears, given your expenses, income and lack of capital.

My parents had 4 of us, and eventually got to buy thier council house, so I know where youre comming from and that you want to better yourselves, but you have to recognise lenders have been severly stressed with bad debt - indeed N Rock went to the wall and others had to be rescued by the state, so you need to be realistic, there is no chance of lenders taking risk just now, and not for some time.

You will get to buy a place in the end, but I'd say get rid f the car loan (lots of my clients have a cheap reliable old banager and no loan in your situration), and hard as it seems, try and save - say the money you were spending on the loan.

Best of luck - not the end of the world - in Germany hardly anyone owns property.

iscrimger

Getting the quotes is really the hardest part of this scheme.

All you have to do is obtain 3 quotes based on your income and submit them to LinkHomes. The scheme does partly rely on your ability to get a mortgage it is not designed to get you the mortgage. Although it does play a part as I've found.

You do have a large car loan & high rent so I'd imagine your living circumstances are difficult and thats without children.

If you submit your 3 quotes to Link Homes and use the space provided at the end of the application to list your circumstances you can enter the Lift scheme with a share under 50% of the property if they find your circumstances are exceptional.

I would perhaps also contact them prior to submitting your application to get some advice.

You say you care for your gran. Have you looked into the Carers allowance - I'm not familiar on the scheme but it's certainly something you could look into.

Unfortunately your car is holding you back, the loan for that is a lot per month not to mention the cost of car tax, insurance & petrol which you haven't stated.

You also say you are living within your means. I get the impression you are, but you are using every penny that comes in. This is not ideal for the banks with changing interest rates you have to be able to meet increases in your mortgage payments if you don't have a fixed rate.

I'm not without my own problems for this LIFT scheme so I'm here to help!

poppy10_2

With no deposit you've got no chance, and rightly so.

Mrs_Bumble

I totally agree with conrad's and poppy10's comments above.

If you didn't have the car loan then the amount that you could borrow would increase. A loan payment of £264 per month is taking huge chunk out of your monthly income.

There is a lot of pressure on that one income into the household and if your husband were to be made redundant or be long term sick that would dramatically affect the household, and so when looking at affordability in a case like yours lenders are justifiably conservative.

weesie81

poppy10 wrote: »

With no deposit you've got no chance, and rightly so.

you are correct i have no saved deposit,however the scheme are offering to put down a 20-40% one as i stated in original post.
my original question was will nobody help us, not should anyone help us?
i am already aware that most people on this board hate the govenment initiatives so did not want to get into a debate about that.
the point is to apply for the scheme i need 3 quotes and am struggling to get those hence the reason i am venting my frustration.
i am in no way disgusted at lenders for being sensible,think about it if i was i would be one of the many people on this board now stuggling with 100%+ mortgages and negative equity which i am not!
need my car have my gran (registered disabled) and 3 small children to consider so that going is not even an option.
iscrimger thanks for your advice and help so far in this process i have not spoken to my own branch yet of hbos am hoping for more luck there.

geoffky

what will you do when interest rates rise to ten percent or more.... you can not afford to buy it is simple as that...

weesie81

geoffky wrote: »

what will you do when interest rates rise to ten percent or more.... you can not afford to buy it is simple as that...

is that not what the 3-5 year fixed deals are for?
a mortgage of up to £80k even at a rate of 6% would leave us £250 a month better off than we are now.

anyway like i have said i am not asking for advice from people who do not support the schemes everyone is entitled to their own opinion.

Mrs_Bumble

Its not about supporting the scheme, it is about you being able to afford what you are taking on. How much is your husband take home pay, how much tax credits do you receive?

Geoffky has a very good point, a 3-5 year fixed rate gives some stability but only for 3-5 years what if you came out of that period of time and the interest rates were 10%?

An 80,000 mortgage over 25 years at 6% would cost approximately £522.00 at 12% it would cost £850.00. Now you may well say that your rent is £650.00 per month and we pay that but the difference is that if your husband did lose his job you could apply for benefit and get your rent paid. That doesn't happen with a mortgage, at present you would have to wait 13 weeks before any entitlement kicked in, if the Government decides to revert the waiting period back to what it was originally then you would have to wait 26 weeks. So for the period of time that you don't get any help you fall into arrears.

Yes you can take out an MPPI policy but for that is going to cost you more again and can your household budget take it?

iscrimger

There is a lot of debate about these government shared equity schemes but the Scottish Government scheme works completely differently from the others and I think I'm going to make a thread that hopefully can be made sticky to help folk out as other than the stuff they send there isn't much around to help.

While you may need your car it does seem like a very large payment for the car loan alone. Perhaps you should get a cheaper alternative.

As your husband is the main income provider the bank will have to take that into consideration. If he were to lose his job you will have no way to provide the mortgage payments.

I have taken a very indepth look at my finances and the scheme does advise you seek financial advice before applying or progressing. (Bearing in mind you have not applied or been accepted into the scheme.)

I have worked out my financial situation as best I can for the next 5 years undertaking a mortgage with interest accumulating at 13% after the first 2-3 years. That rate is highly unlikely but it's better to be prepared for a higher rate in the future. I've also looked at the situation if rates were to be even higher, both of the outcomes rely on me saving money from the outset of getting a mortgage. This is in addition to my savings & investments I already have.

If you take on a mortgage of £80k now, and in 2 years you can't raise your stake, then in 4 years time the option comes round again you have to think if you will be able to increase your borrowing a further £20,000. If you cannot see any reason for your income to change in the next 2 years then you have to ask how you will be able to afford your increased stake in the future.

weesie81

firstly can i say the government would not pay our rent as the agency we let from do not accept dss tenants at all.
i would not even consider a mortgage without a payement protection plan as my husband brings home our only income at the moment.

in 4 years time our situation willl be very different as our youngest will be at school allowing me to return to work where my salary is actually higher than my husbands.
as i have said, and will again i am not looking for negative comments on why i should not enter the scheme. i have not made judgements on anyone else on this board or their situation so please do not have a go at mine unless you have some thing useful to say about LIFT scheme please leave alone i did not come here for a debate.