Buying New Build - Mortgage

dilemma10

kingstreet wrote: »

As I mentioned, if you already had a mortgage promise, the Halifax system had taken that into account and you still scored enough to pass. If the only variant between the agreement in principle and the full app was the addition of the shared equity, it is that which has caused the decline.

Let your adviser exhaust the appeal process before you do anything else and as I advised by PM, make sure the solicitor does not do any searches before this matter is resolved.

If it was me, I'd even have Halifax do a bit of trial and error around different deposit levels without the shared equity to see what they would give you if you had a deposit of your own.

Hopefully, at this moment, your "at risk" money is zero as anything you've paid out can be called back if you can't proceed.

Dear kingstreet, thank you for your help on this matter as always. I am having no joy with my broker - who has not mentioned differing deposit amounts/shared equity as a problem.

My new build is under HomeBuy Direct and only 3/4 lenders apparently lend under this and Halifax is chosen as one so would it necessarily be an issue of shared equity? The HBD is not necessarily shared equity is it as I do gain 100% title to the property?

I am exhausted by my mortgage advisers who are not very good. What would you advise me to do? They asked me to put in an appeal for my Orange default - nothing else! It seems I am guiding them and not the other way around.

I must also add, they tried Natwest too today and that failed!

I wish they would talk to an underwriter direct? It seems they are only dealing with automated machines!

Could it be that my deposit is being gifted by my father?
:mad:

kingstreet

dilemma10 wrote: »

Dear kingstreet, thank you for your help on this matter as always. I am having no joy with my broker - who has not mentioned differing deposit amounts/shared equity as a problem.

My new build is under HomeBuy Direct and only 3/4 lenders apparently lend under this and Halifax is chosen as one so would it necessarily be an issue of shared equity? The HBD is not necessarily shared equity is it as I do gain 100% title to the property?

I am exhausted by my mortgage advisers who are not very good. What would you advise me to do? They asked me to put in an appeal for my Orange default - nothing else! It seems I am guiding them and not the other way around.

I must also add, they tried Natwest too today and that failed!

I wish they would talk to an underwriter direct? It seems they are only dealing with automated machines!

Could it be that my deposit is being gifted by my father?
:mad:

The reason for the decline is a "best guess" as no-one gets to know why the box decides you don't score enough points. As I mentioned, when you do a Halifax mortgage promise, you do it on the basis of the amounts involved, so £100k purchase price and £35k deposit leaving a mortgage requirement of £65k. That would normally generate an A pass for most borrowers.

When you get to full app stage, you key in £100k purchase price, £30k shared equity loan and £5k cash, leaving £65k mortgage, that's the point you find your "score" affected. It isn't so much a credit scoring issue as a re-evaluation of the deposit, most of which changes from cash to loan in between the two stages. At that point, you can go from A to B, B to C, or C to decline.

If the Orange default meant you were only at C to start with...

Coming back to your point here it is known as shared equity, despite you purchasing 100% of the property with a mortgage and a loan from the developer or registered social landlord.

I've keyed a similar case in Trigold. £100k purchase price, £30k equity loan, £5k deposit and £65k mortgage. Other than Halifax and NatWest, only deals from Nationwide, Newbury, Principality and RBS are shown. I'd ignore the latter as RBS and NatWest are effectively one and the same.

A friend of mine is actually on the Orbit homebuy direct panel for the area. I'll call him in the morning and see if he can give me any pointers which may be of help. He is the one who told me the way the score changes between AIP and full app with the Halifax when you are applying for shared equity.

funky1471

Me and my partner also have an application in at the moment.

We passed the decision in principle, just put in the full electronic application on Friday afternoon.

Any idea how long they take to come back? Dilemma10 mentioned it was declined "right away" when your advisor put in the full application..How long did it take to get that answer?

We are buying on a scheme, but not the HomeBuy Direct one (It's similar but HBD wasn't the best option for us, although we were accepted for it at 26%)

We are just waiting for the final decision, if it's a no then we will have to look at renting again for another year.

I didn't know that the DIP is done, based on it not being on a scheme, it makes sense how it was described, but now it's made me less confident of getting accepted at the final decision.

The app went in electronically on Friday, so hoping it goes through fine.

I have 2 other questions that somebody may be able to help with:

1. If I ask out Independent Mortgage Advisor what we were accepted at (A, B, or C) will he definitely know this? Because he didn't mention it to me??

He's done a lot of mortgages through this Halifax product, so I would imagine if it came out as C, and he knew that the shared equity means you drop a level, surely he would have mentioned?

Does it actually count as shared equity if you are owning 100% of the house? I always though of it in my mind as the equity taken on by the developer is more of a loan, the value of which fluctuates with the rising/dropping of the houses value? Why does this matter to Halifax as long as they get their money?

We would love to not have to go through one of these schemes, but the truth is, paying rent on a city centre flat and saving up 20%+ of a house purchase is hard to do, what with all the rising living costs (Which seem small in isolation, but the odd £30 - £50 increase here and there for electricity, car insurance, travel etc certainly adds up)

2. Is there definitely a full credit check done at the DIP? That's the main bit we were worried about, so wondering if that bit has been done and came out OK.

kingstreet

A full application is scored immediately and a decision given at the time. If you haven't been told, it was probably a decline or a refer and your adviser is waiting to speak to someone from Halifax.

When you key a mortgage promise, it tells you the maximum loan amount and the documentation needed to support the full application. You can tell the pass grade from this, or from talking to Halifax if you speak to them about the requirements.

He would be unlikely to submit an application he knew would fail, but a lot get "referred" and end up having to be discussed manually. Shared equity is a bit of a misnomer. It is a second charge held by the developer or registered social landlord. Regardless of what it is, the deposit is reduced and the commitment from the applicant is less.

A full check is done for a mortgage promise but one post on here the other day suggested previous addresses are only taken into account when a full application is keyed. Whether or not this is true is not known to me.

funky1471

Hi kingstreet,

Thanks very much for taking the time to reply.

I only asked on Friday around 4.30pm for him to do the full application, so it's likely he didn't do it until 5-ish or so, or maybe didn't get a chance until Monday anyway.

But he did say right after I asked him he would try and do it before he leaves the office and will call me Monday/Tuesday.

I guess we will just have to wait and see what happens.

We sent through payslips for my partner, and my new employment contract (Start a new job in a weeks time) as well as other proof of address such as utility bills etc.

I assume these will need to be seen before a decision on the full application is made? So it will need to be viewed Monday by the Halifax.

The suspense is horrible as we really would love to get the house, if not we will be happy to rent for another year and then see what our situation is.

If it's renting again then it's a case of moving out of the city centre as rent seems to have shot up along with a 33% increase to electricity and 20% car insurance etc.

Thanks for your help, we will be keeping our fingers crossed for next week.

The_Palmist

any happy endings here ?