Help to buy - newbuild eligibility criteria

grrrhouses

I have just been told that in order to be eligible for this scheme the total purchase price must not exceed 4.5X total income which seems reasonable. However, this cannot include any income from either child tax credit or child benefit, though can include working tax credit.

Does anyone know if this is actually correct? The person giving me this information was from the local Homebuy Agent and said this is government guidelines and definitely was right.

I would have thought that child tax credits is a major part of many working families income and know that many lenders take it into account when calculating mortgage borrowing figures.

If anyone can shed any more info, or confirm this is defo the case, I would be very grateful.

kingstreet

Not true, no.

The mortgage must be within 4.5x gross annual income, not the purchase price.

In addition, the mortgage cost, plus any other credit commitments must be within 45% of household income.

Tax credits and child benefit are entered and do make a difference.

If you want a copy of the (Excel) HTB Calculator, PM me your email address and I'll send you a copy.

grrrhouses

Thanks so much. Thought it seemed odd.
Don't know how to use forum or PM yet but yes would love that info and will do that soon.
No one (but you) I have talked to seems to know how this scheme actually works. Don't know what to do as the professionals around here seem useless!

kingstreet

We're doing three or four applications a week on HTB.

We get the mortgage agreed and refer them back to the builder to do a provisional reservation.

The reservation form (RES) and part-filled property information form (PIF) are sent to us, we finalise them and send them to the HCA HomeBuy Agent concerned, our are Catalyst or Orbit.

Once the ATP (Authority To Proceed) is issued, we refer them back to the builder to complete the full reservation and pay the fee, then we get together with them to complete the mortgage application and collect the supporting docs.

We've got it working reasonably well now, simply due to the number we're doing.

TBH first job is always to ensure it fits the HCA HTB Calculator and we send a copy to the HomeBuy Agent with the PIF & RES so they can see why/how it fits.

kingstreet

grrrhouses wrote: »

Thanks so much. Thought it seemed odd.
Don't know how to use forum or PM yet but yes would love that info and will do that soon.
No one (but you) I have talked to seems to know how this scheme actually works. Don't know what to do as the professionals around here seem useless!

Click on my name, to the left and pick the "send private message" option. Stick your email address in there and you then press "send."

grrrhouses

Thanks have done that now.
Think i'll ring them back and have another chat, hopefully with a different person though. The homebuy agent is Southwest Homes and is the only one around here. Bit scared of the whole process now as if they don't know what they are doing ours chances of success seem slim!

kingstreet

Well, the Calculator has an entry to add Working Tax Credits, Child Tax Credits, Child Benefit, Disability Allowance, Other Income and Guaranteed Maintenance and so does the PIF.

It would therefore appear perverse to request information on such things, then exclude them, which I'm pretty sure the Calculator doesn't.

kingstreet

grrrhouses wrote: »

The homebuy agent is Southwest Homes and is the only one around here

It is if the property is here;-

Avon, Cornwall, Devon, Dorset, Gloucestershire, Somerset and Wiltshire

grrrhouses

Think we will probably be border line case anyway will post our details so that I can let people know if we do get the approval and mortgage etc.
Joint application. 1 working, 1 stay at home mum. 34 and 35 yrs old.
Dependants 4

Wages 21,300 pa
Child Tax Credits 9990
Child benefit 3146

Debt 193 pm. 4 years left of old 9 yr homeowner loan. (currently renting) No other debt. Excellent credit history. looking for a 35 year ish term.
Deposit of 10k. Looking to purchase for £165000 ish
Fancy a guess at our chances anyone?

kingstreet

It's out on the HCA affordability calculator and the Halifax affordability calculator output is £14,825 over 34 years.

Non-working spouses aren't liked by lenders. You need to be earning about £6,000 a year to justify a £120k mortgage with the rest of the information. Getting rid of that £193 per month credit commitment wouldn't do any harm either.

grrrhouses

Ok. Thanks for your help. Guess its a case of save lots more and get a normal mortgage if we can. Thought it was worth investigating though.