HELP TO BUY declined. Please help

FTBSOS

Hi there, my help to buy mortgage application has been declined by natwest and they won't share why. I also tried with halifax but they wanted an extra 15% deposit from me (they treated HTB as 95% mortgage)

I am absolutely gutted and angry because I really wanted this house.

I meet the affordability, my mortgage broker sent me an email stating:

As per my voice mail message today I am afraid that after exploring every avenue we are unable to place your mortgage, in the main this will be due to your credit history. My advice is to make sure that any outstanding items are paid and maintained properly, that you do not apply for credit for a while (six months or more) and that you keep an eye on your file using a site such as https://www.checkmyfile.com to make certain it is a true reflection of your situation.

Although there is no guarantee that this will be sufficient to improve matters you may then be able to try again during the early part of next year.

I’m sorry to be the bearer of bad news, please feel free to call me if you wish to discuss this in any more detail.

Best regards

I checked my credit file over and over again, nothing negative, on electroll roll, never missed a payment, no ccj's, defaults,only negative is a few credit searches here and there. I have a few linked address's on my file, but nothing out of the ordinary.

What can be my next step? Try nationwide?

Yorkie1

Did you check all 3 credit reference agency reports?

Thrugelmir

Any debts or overdraft usage?

brit1234

It may not be what you want to hear but you may of had a very lucky escape. The Help to Buy scheme is very bad with the vast majority of agencies vocally shouting against it. Having a overvalued new build with a 5% deposit will leave you most likely leave you in negative equity and trapped.

Just keep saving that deposit, you will get there in the end.

FTBSOS

Yorkie1 wrote: »

Did you check all 3 credit reference agency reports?

Hi, yes i did, CC, EXP and EXQ, all showing nothing adverse.

Thrugelmir wrote: »

Any debts or overdraft usage?

I have debts in the of around 1k, spread between 5 different credit cards, with a total limit of 3.5k limit combined. NO overdraft whatsoever.

brit1234 wrote: »

It may not be what you want to hear but you may of had a very lucky escape. The Help to Buy scheme is very bad with the vast majority of agencies vocally shouting against it. Having a overvalued new build with a 5% deposit will leave you most likely leave you in negative equity and trapped.

Just keep saving that deposit, you will get there in the end.

Yes there are flaws with the scheme, but it's a very good way on getting on the property ladder.

Furthermore, the house is priced very reasonably considering avg. house prices in the area.

Also, I will have the funds to pay off gov before year 6. With this scheme, house prices will be an extra 10 - 20k more guaranteed this time next year.

That is why I wanted to get this house badly, I've fallen in love with it, plus I have a thing about new builds, I just want a new build. It is situated perfectly for myself and my mum who will be coming with me.

If anyone can put me in touch with anyone who can help me out, that would be fantastic.

demontfort

FTBSOS wrote: »

Hi, yes i did, CC, EXP and EXQ, all showing nothing adverse.



I have debts in the of around 1k, spread between 5 different credit cards, with a total limit of 3.5k limit combined. NO overdraft whatsoever.



Yes there are flaws with the scheme, but it's a very good way on getting on the property ladder.

Furthermore, the house is priced very reasonably considering avg. house prices in the area.

Also, I will have the funds to pay off gov before year 6. With this scheme, house prices will be an extra 10 - 20k more guaranteed this time next year.

That is why I wanted to get this house badly, I've fallen in love with it, plus I have a thing about new builds, I just want a new build. It is situated perfectly for myself and my mum who will be coming with me.

If anyone can put me in touch with anyone who can help me out, that would be fantastic.

Well I have a thing about Ferraris and want one but can't afford one either. Take the advice.... move on, save up and in the long run you'll be in a much stronger financial position and thank your lucky stars you didn't get suckered in.

Strikeman

It may not be what you want to hear but you may of had a very lucky escape. The Help to Buy scheme is very bad with the vast majority of agencies vocally shouting against it. Having a overvalued new build with a 5% deposit will leave you most likely leave you in negative equity and trapped.

OP I am seriously considering the Help To Buy scheme too! People talk of instant negative equity when they buy a help to buy, almost like buying a new car and losing £1,000 driving it off a forecourt. However remember the value of the equity loan reduces with the value of the property, so if you borrow £20k (20%) and the house drops in value by 2% each year, your loan value is now more like £18k instead of £20k, so its proportionate.

Well I have a thing about Ferraris and want one but can't afford one either. Take the advice.... move on, save up and in the long run you'll be in a much stronger financial position and thank your lucky stars you didn't get suckered in.

Whats her alternative, continue paying £500 (at a guess??) rent per month which is effectively paying someone else's mortgage for them? How much in wasted rent to get the deposit she needs, is it proportionate to any loss she would make by taking part in the scheme??

[Deleted User]

Strikeman wrote: »

Whats her alternative, continue paying £500 (at a guess??) rent per month which is effectively paying someone else's mortgage for them? How much in wasted rent to get the deposit she needs, is it proportionate to any loss she would make by taking part in the scheme??

Wasted money is such a poisonous view point when it comes to renting vs. buying. There are benefits to purchasing somewhere and one of those is indeed that you are investing vs. paying. However for most people who focus on purchasing because of this they end up so focused on the idea that they're saving money on not having to pay rent that they enter awful mortgage deals on not-great houses using magical schemes.

There are a large number of factors to consider:

1. If you purchase a house with a huge LTV you are going to paying mainly interest costs at the start of the mortgage. You might be building up some equity but it's going to be a small amount.

2. These schemes are not free money they have to be financially solvent and account for potential losses when house values fall. There is a cost to using one of these schemes that will increase the amount of money spent that is not increasing equity.

3. For someone earning £25,000 per year the difference between 5 and 10% of a potential deposit is not an amount of money beyond reach. If you're looking to purchase a house worth £125,000 you will need a deposit of around £12,500, if someone earning £25,000 per year is not capable of saving £6 - 8k per year they are not suitable for home ownership.

The serious problem in this country with getting on the housing ladder is that house prices are too high relative to income. House prices are supported by supply and demand. How do these schemes do anything but increase demand? They make hundreds of thousands of new buyers available to sellers, as a result sellers can be much more picky and increase prices!

These schemes aren't making a new £100,000 house within reach of Mr & Mrs New Graduate, they're making a new £100,000 house £125,000 and then encouraging Mr & Mrs Graduate to enter into an extra £25,000 of government sponsored debt because they "need help".

Affordable housing (rental and ownership) does not mean the government should be subsidising young peoples purchase of crappy houses that are only worth so much because of the governments "help".

If you can't afford to save for a deposit then you can't afford to own a house.

I live in a house worth roughly £300,000 (I'm renting) and I've looked at some of the new builds on developments in this town priced at roughly the same and the quality of living is terrible. Nobody in their right mind would ever choose those houses over the house I am in, even if it was £100,000 cheaper to live in the new builds... but conveniently it's your chance to get on the housing ladder! buy buy buy!!

SG27

FTBSOS wrote: »

Hi, yes i did, CC, EXP and EXQ, all showing nothing adverse.



I have debts in the of around 1k, spread between 5 different credit cards, with a total limit of 3.5k limit combined. NO overdraft whatsoever.



Yes there are flaws with the scheme, but it's a very good way on getting on the property ladder.

Furthermore, the house is priced very reasonably considering avg. house prices in the area.

Also, I will have the funds to pay off gov before year 6. With this scheme, house prices will be an extra 10 - 20k more guaranteed this time next year.

That is why I wanted to get this house badly, I've fallen in love with it, plus I have a thing about new builds, I just want a new build. It is situated perfectly for myself and my mum who will be coming with me.

If anyone can put me in touch with anyone who can help me out, that would be fantastic.

Oh dear lol. I'm not sure who told you this but if you are buying with this assumption your are making a big mistake! No one has a crystal ball and prices are just as likely to be £10-20k lower this time next year. In fact even more so with a new build! I don't expect my house will increase in value at all over the next 5 years at least! And why would I want it too? It's a home not a BTL investment.


I think you need to clear your debts before thinking about mortages again.

jedsonack2

Did you checked your debts and overdrafts you have (If any).....?

oxfordmark

You said you had small debts in 5 different credit cards. That can't of helped. Could you not balance transfer it into one card then closer the other 4?