homebuy direct advice please!

cocomonkey_2

Hello all,

We have just been assessed and approved for the Homebuy direct scheme. We are at the higher end of the earnings threshold so have been told we will probably only get the 80% to 20 % ratio - which is fine. Is the earnings threshold of £60k basic salary does anybody know? I get an annual bonus which isn't guaranteed at all - will this class as earnings or is it basic salary only that matters for eligibility?

Also we have the mortgage adviser coming to sort our mortgage app for us and he wants last three bank statements - is this to prove access to savings? Our savings for the deposit are in another account and am worried we may get rejected or something.

Any advice about the process I can expect would be much appreciated - getting very stressed about the whole thing already as have heart set on a house we have reserved.

Cheers
Coco

DG84

Hi Coco,

My hubby and I have exchanged contracts for a gorgeous 2 bed house on the homebuy scheme. Without the scheme, we would not have been able to afford our own home for another 2 years (paying dead money on rent). It has been a pretty smooth process for us so far and here are a few pointers for you:

- Your salary can't surpass 60k which is based on your basic salary.
- Bank statements to show how stable your incomings/outgoings are. I would advise you to clear any overdrafts asap.
- Show a statement for your deposit savings - we did the same.

Your credit rating has to be good. It is very stressful and I was constantly on the phone to people speeding up the process. It involves a lot of ppl - the housing organisation (Catalyst in our case), the developers, solicitors and the mortgage company.

Good luck and feel free to fire questions!

cocomonkey_2

Thanks DG for the reply. Delighted to hear how smoothly it all went for you!

Mortgage adviser coming tomorrow to sort application out for us so fingers crossed!
Can I ask what percentage you got in the end e.g 20 -30pc?

We have paid to check both our credit ratings which are good - and I have since tried to boost mine further by cancelling empty credit card accounts and found I had one late payment marker against a credit card which wasn't true and have been able to rectify that. So hopefully we should be in a good position to get a mortgage!

When do you move in?

AbsoluteReturn_2

Coco, don't mean to rock the boat but why do you want to buy a portion of a house? You are still paying dead money in mortgage interest and rent on the part you won't own. The Homebuy Direct scheme is just a means to support the UK property ponzi scheme. After the election this and other taxpayer funded support will be removed (google SLS and CMG) and house prices will fall to a level where you can buy on your own. Have you considerd how difficult it is to sell a part share of a property?

cocomonkey_2

Absolute - thanks for your post. One question - if house prices plummet after the election as you predict - are lenders going to become a bit more liberal with their mortgages? Fact is most lenders are still asking for 20 pc deposit at least to get a decent rate - herein is where the problem lies. In an ideal world we could save 30 grand - however the realities of this are very different with cost of living etc. We are tired of renting and we will have 100pc ownership of the house and fully intend to buy the 20pc back in five years. The way we look at it is it's getting us on the ladder and gives us five years in a nice new house to save the deposit. Also the house we are intending to buy is actually pretty cheap - I can't imagine house prices plummeting that much.

cocomonkey_2

Oh and we only get a mortgage for the 70 to 80pc - we don't pay interest or "rent" on the subsidy from the govt/housebuyer. So not too sure what you mean by that

hmd1987

Hi Cocomonkey, my partner and I actually went to look at some houses yesterday on the homebuy direct scheme. When we went into the reception area, had a really good chat with an advisor then we had a phone conversation with the local homebuy people who gave us a quick assesment and said how much we would be entitled to based on our salary, savings etc which was really good.

We found one house, but didnt like the plot, apparantly there is one on a better plot which is going to be ready in a minimum of 6 weeks. I think its our only way of getting on the property ladder, no way we could save up like 30k.....please could you keep us updated on here the process that you go through, just so i know what we can expect

DG84

Hey Coco Monkey!!

Well ours is 75% mortgage and 25% equity loan. We are still waiting for the house to be built lol!! It will be ready in September. It' so exciting to choose everything from scratch!! I totally agree with you in that it's an impossible market for first time buyers without these schemes. Don't let pessimists who have old fashioned views ruin anything for you.

Absolute return: Maybe you should do a bit of light reading and get some HARD FACTS before you start criticising people on their choices - IE WE DONT PAY RENT ON HOMEBUY DIRECT!!!! Also, this forum is clearly for ppl who want to discuss homebuy direct not for you who clearly has nothing better to do than go on random forums that have no relation to you whatsoever.. go and start your own forum elsewhere!!

HMD: Just make sure you stay on the ball with the whole process. Do lots of ringing around and pushing ppl along to get the process moving.

DanielleNic87

Me and my OH have joined up to the Homebuy Direct scheme. But they are still asking for a 5% deposit on the share that we are going to get a mortgage for! i just assumed that because we are only getting a 70% mortgage, we wouldnt need one :-(

hmd1987

danielle- basically its a minimum 70/30 split, with the agreement that you have 5% deposit and you make up the other 65% with a mortgage

currently stuck with an overdraft, but should find out by the end of the week if i can get it cleared. If i can then i definitly think we will be going to apply

DanielleNic87

I could borrow the money from the bank of mum and dad, but i want to do it on my own! so will just have to wait a little longer.

I went to a homebuy direct roadshow on friday in my area, an they said they are withdrawing the funding for this scheme in september :-(