Home Buyers Direct huge problem

v9017899

Hi Guys. Ive heard alot of doom and gloom about this HomeBuyers Direct scheme but in my instance its the only way I can have my own home. But now there's a problem.

I have 4 children and am married. I`m renting a 4 bed house and want to have my own house. Now the problem is I`ve gone back to university to get a degree in computer science, so there is only one wage coming in, (though not a bad one as she is a staff nurse).

My income, with all my grants, loans, bursaries, child tax credits etc (I don't know if they take that into account) is around £24,000. Wife's income is around £20,000.

Around 6 years ago we sold our house. When we sold it we thought all the loans and such would be paid off from the proceeds from the house. So we asked the bank (RBS) and they said yes they have.

A year ago we got a phone call (after we have moved rented accomodation three times) from a agency employed by RGS to find us. They said we owed £12,000 from a loan we took for a conservatory. It was then the penny dropped why we haven't been able to get credit anywhere or even get a high interest creditcard.

So the next day I went and paid this off, after a settlement figure was agreed. It will be on my file for 6 yrs but now would say settled. I looked at my credit file and there was a couple of reds but all settled or satisfied.

A year later we decided to go with this HomeBuyers Direct, as this would give me the only avenue to buy my own home as I was still at university. We picked the house and applied through the broker. We were turned down again. He looked into my credit history and with a few past hiccups but all cleared he seems to think there would be no problem (backed up with letters from banks and building societies vouching all paid off).

I always thought if you declared your partner on your credit application then hers would be on your credit search as well, this i found untrue! We have opened my wife's credit file; 8 years ago she had a credit card that she maxed out cos we where in difficulty and have been paying off the minimum (not a wise thing to do as its just never goes away). Somewhere along the line she started to forget to send the cheque to them. We had moved and things were up in the air at the time between us. So that was the debt! Straight away we rang them and paid it off. Three weeks later, looking at the credit history, all debts are paid off and we are free from it all.

Now the problem for us is that the builders have said that HomeBuyers Direct scheme is stopping in March (not good for us!) That will leave us scuppered. You see I do have a deposit of £35,000 but it has to be a 4 bed and in NE england near their school. I'm looking at a £195,000 house (a new build of course). It's a lovely big house and the family is grown at 15, 12, 10 and 5. My age will go against me soon so I'm now very worried because without this scheme I dont see any way forward.

It will take 6 months to show on the credit that we are not constantly taking more than we can afford. Indeed we're very carefull. I read on here if I get a very high interest rate credit card (the only ones left open to me), make purchase and pay it all off each month before the interest kicks in, it will help my credit score. So i applied last week for one of these special credit cards for only ppl like me and I still got turned down. So I've applied, failed and it could go against me on my credit score again!

The only thing i could think of why I was turned down is that have they had not got me on the electoral roll (renting and moving can some times do this) and indeed they hadn't. So I will appear now on the register in december. There are a few negatives (reds) on the search which at first glance would be against us for a morgage but I have paid them all off. Indeed it's been many years since we asked for credit, but between the credit card that my wife forgot about and also the indication by the bank that loans would be paid off from the house proceeds, I thought we were ok.

What am i going to do now that the scheme is being scrapped? I would have only had to find £110,000 on a £195,000 house with their 30% and my deposit, so it was within reach.

Forgetting our infidelities of the past and the positives of the future, is there anything we can do sooner rather than later? I'll be 47 by time I leave fulltime uni. It seems I can't even get a high interest card at 29.9%!

Cheers - sorry about the war and peace, I just needed to get the problem off my chest. It's like a weight believe me.

Fire_Fox

Getting on the electoral register is a quick job - fill in the forms, speak to the council and get your roll number and pass this onto the credit reference agencies yourself. Note that lenders prefer to see stability, and moving three times in a few years and only just appearing on the electoral register does not convey this.

Second problem is that you do not have any income whatsoever. You won't be receiving these grants and bursaries forever, in fact you can only guarantee them for this academic year. Benefits are not usually taken into consideration when applying for a mortgage.

Lastly you both have a poor credit rating. It will be six years from the last default before these disappear from your credit file, tho you might get a mortgage or loan before then. Simply having paid them off is not going to be enough.

All in all you have no chance of buying another property for the next few years. Try again once you are back in full time employment - banks will lend to more mature people if you don't go for a 25 year term. In the mean time get more on top of your finances, and work on increasing your deposit - in the current climate banks are looking for 10%+. The more you have the more likely you are to be offered a favourable mortgage.