NewBuy / First Time Buy advice

daveyb1986

My husband and I are trying to get on the property ladder - we've been renting for 9 years and want to make our first property purchase. We've visited a couple of developments and had a discussion with an mortgage IFA.

During the discussion, he advised he would place us with Abbey (Santander) even though out situation was unusual. (He is self-employed, 4 years with 3 years accounts showing a solid increase in income of £8K to £10K each year, and I am employed by him). We were told that the lender would only take his income into account.

Initially told that Abbey wouldn't look at the case based on the last 2 years figures alone. They then requested the year before and then suddenly they said they would look at it using last years income (brilliant!). So after some backwards and forwards - our IFA got to working on the agreement in principle. He then come back to us and said abbey declined due to a low credit score. So we ran a credit check Equifax and was suprised to see that the score was in the green (Good) and there were just 2 defaults on credit cards from about 6 years ago (but the cards are now settled).

Our IFA then said he would try with Halifax as they offered a similar rate and would also look at the application based on last years figures. They also came back declined after the agreement in principle was submitted, but they failed to give a reason why.

We are now stuck as we don't really know what the reason for the decline(s) were, and therefore don't know what we need to do to rectify the situation, despite being led to believe there is no problem with income, and as far as we can see, there should not really be a reason why it's failed on the credit score.

Has anyone else had any problems with trying to get a new buy mortgage? Any advice? We're tearing our hair out - it's so frustrating.

kingstreet

If it's 95% it has to be absolutely clean.

If you have historic adverse credit information visible on your credit file it should never have been submitted to Abbey/Santander as their policy is currently "no adverse."

I doubt your chances of 95% if Halifax has also said no.

daveyb1986

Why does nowhere that advertises the NewBuy scheme make this clear? The reason we went with the NewBuy was due to the fact we've only been able to save for a small deposit due to rental prices in our way being so high. Do we have any other options? We tired of throwing money away on rent - none of us are getting any younger!

Thrugelmir

daveyb1986 wrote: »

Why does nowhere that advertises the NewBuy scheme make this clear?

Lenders never disclose their lending criteria. As its commercially sensitive.

Good personal financial management is the responsibilty of the individual. Not the banks.

daveyb1986

The Firstbuy.org site states that any adverse credit would make that person not eligible for the first buy scheme. Why doesn't the new buy scheme say it? Both are government created and funded schemes.

It's ridiculous to be penalised for 2 late payments on separate occasions 6 years ago. These blips happen to people. Especially as the cards are now settled and there have been no other defaults or ccjs or anything. Feel we've been made to jump through hoops and gotten out hopes up over something we couldn't get in the first place.

brit1234

Just feel lucky, both are terrible schemes and leave you most likely in negative equity.

Is there any way you can rent something cheaper to save a bigger deposit.

daveyb1986

We may have to at this rate. But we've moved 3 times in the last 3 years because of rental prices keep going up, and I understand that can look bad on a credit file as well - so we don't really want to have to move again unless it was something permanent.

It just makes you feel like your bad people, and despite the fact the income is there to cover repayments and fees, we are being turned away because of what happened 6 years ago.

daveyb1986

What if we ignore the new buy scheme and say we were able to secure a larger deposit (15% instead of 5%) - is there any mortgage provider out there that would look at our case? Or are we really destined to be renting for the forseeable future?

holly_hobby

Defaults are not just late payments, they are essentially the recording of the individuals breach of their creditors contractual terms, so are never taken lightly by a lender. (even if as in your case the finance was subsequently totally redeemed).

That being said, if the registration of the 2 default are 6 yrs or more, they should no longer be on represented on your credit record with the CRAs.

Have you checked all 3 agencies to see who's stil showing them ? (try checkmyfile.com - mulit agency free trrial search).

Once you have established where the defaults are still being published, and not removed following their 6th yr anniversary, you can contact the offending CRA to have that addressed (this doesn't need the permission of the OC, as they are classed as spent and as such the CRA themselves have a legal duty to remove any residual inaccurate info such as this).

Hope this helps

Holly

bigadaj

daveyb1986 wrote: »

What if we ignore the new buy scheme and say we were able to secure a larger deposit (15% instead of 5%) - is there any mortgage provider out there that would look at our case? Or are we really destined to be renting for the forseeable future?

That change to deposit would make a huge difference. The tipping point seems to be if you can raise a deposit just above 10%.