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MSE News: Help to Buy 95% mortgages launch today: What are the deals like?

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  • Lcyclayton9
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    I was afraid you were going to say this - it really annoys me as iv been renting since i was 17 and never missed a rent payment (even in hard times - keeping a roof over your head is the most important thing ) but guess what .... rent dosent go on your credit file.
    With this mortgage scheme - would a guarantor help ?
  • Lcyclayton9
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    adamck wrote: »
    I have been waiting for this scheme too.
    I believe that anyone who looks into it deep enough will see its pretty good for all.
    The rates are just under 5% which seems fair, the 5% deposit allows me to get onto the ladder having been able to save up £11,000 for deposit, fees etc...
    Me and my partner both have good jobs (Solicitors and NHS) and we are very careful with our money!
    We have zero commitments/loans/credit cards etc...
    I am booked in with RBS for a chat and hopefully i can
    get started.
    My credit history is clean, i have good credit, ive never been in debt, or missed any bills, payments or anything.
    I have been renting for over 5 years now and its just dead money, and trying to pay £650 in rent, plus bills and save up £11k was extremely hard to do and although people keep pointing out 'there are 17 x 95% mortgages before the scheme went live' it not been possible for me to apply for any of them so far...

    Of the 17 available 95% mortgages... most of them required either:
    A) A guarantor
    B) An existing current account
    C) Living local to the broker
    D) Buying a new build house

    I still havent found anyone (outside of the scheme) that will match what the government are doing with this scheme.

    I'm made up, just need to get it all confirmed now :)


    pleased for you - wish i had a perfect credit file - my score is 4 points of perfect with experian but feel like i wish i hadnt of bothered now - because i obviously have no chance :( Good luck
  • Lcyclayton9
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    BargainMad wrote: »
    To counter any allegation that there will be irresponsible lending, the banks are only going to be offering these mortgages to a certain type of customer. Those who are "Rock Solid".


    I agree with the above poster. I am afraid anybody with settled defaults isn't going to be one of them.

    Besides this people will also have to prove their income both in the past and going forward. Somebody may have a good salary now but they are going to be looking at whether this is going to be maintained throughout the mortgage. In the past there was too much of an emphasis on overtime and benefits being acceptable forms of income. But for these mortgages they are going to be looking at how sustainable the basic salary is rather than trying to big up your income on every other front.

    Additionally all other credit obligations with all other providers will be factored in as well as all other outgoings.

    In essence - really tight criteria and no "softening" or nods and winks like in the pre-2007 days.

    Anyone who doesn't fit these criteria is not going to get one of these mortgages.

    In reality it is a return to the sensible and sustainable lending which existed before the rush to lend to anyone with a pulse. Lending which ultimately led to the collapse of the RBS, Natwest, Halifax and all the rest.

    There is too much in the media about these new 5% mortgages being reckless but in reality they will only be granted to those with perfect profiles.

    What are my other options ? I could possibly get a guarantor but no higher deposit ?
  • darkvader
    darkvader Posts: 267 Forumite
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    Posting what I stated in my post earlier today

    For those who cannot save for or have enough deposit, it is FAR more beneficial to buy a New Build, even if at a premium. Clearly, for those of us who cannot afford a second hand home because we need a 25% deposit for a decent mortgage then might as well et a brand new home with all the works

    1. You give 5% and get 20% from the govt
    2. You then get a 75% mortgage with interest rates of around 3%

    Lets say you can even pay the 5% to 5.5% interest on the 95% mortgage. Instead

    1. Calculate the difference between this payment and the new build
    2. Put aside the extra cash you save not paying the higher interest
    3. More than likely this cash can used to pay off the govt 20% after 6 years time
    4. You also own a bigger piece of your property, from the mortgage lender that is, to remortgage after 5 years on to a better deal

    Help to Buy Round 2 should have been locked up and thrown away :(

    DV
  • dgtazzman
    dgtazzman Posts: 1,140 Forumite
    edited 8 October 2013 at 3:08PM
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    I actually think it's quite funny. I believed the point of this second phase of the HTB scheme was so people that are 'rock solid' as somebody else put it, could get a 95% LTV mortgage and 80% LTV rates. The rates they are now actually using for these products don't really match the idea behind this scheme though. The rates seem to be 1%-1.5% higher than 80% LTV products. I know around 0.9% of this will be the cut the mortgage provider has to pay the government, but still, to me this doesn't look like the product they were dangling in front of the electorate beforehand.

    And to the poster above, I am using the HTB new build equity loan scheme. I don't intend to repay the equity loan after year 5 is over. I think it's more beneficial to overpay the mortgage as the interest rate on that is higher than the rate on the equity loan for quite a few years after that and that is assuming interest rates don't rise. The only danger is house prices rocketing up, thus raising the repayment value of the equity loan, but at the same time, the sale price of the house would go up, so I don't really consider this putting me out of money.
  • koloko
    koloko Posts: 1,766 Forumite
    First Anniversary Combo Breaker
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    it really annoys me as iv been renting since i was 17 and never missed a rent payment (even in hard times - keeping a roof over your head is the most important thing ) but guess what .... rent dosent go on your credit file.

    Are you suggesting that that people should be rewarded for paying their rent?
  • Lcyclayton9
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    koloko wrote: »
    Are you suggesting that that people should be rewarded for paying their rent?

    No but your credit file is rewarded for paying loans that you have took out ? so why not rent?
  • Lcyclayton9
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    koloko wrote: »
    Are you suggesting that that people should be rewarded for paying their rent?

    No but your credit file is rewarded for paying loans that you have took out ? so why not rent?
  • darkvader
    darkvader Posts: 267 Forumite
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    dgtazzman wrote: »
    And to the poster above, I am using the HTB new build equity loan scheme. I don't intend to repay the equity loan after year 5 is over. I think it's more beneficial to overpay the mortgage as the interest rate on that is higher than the rate on the equity loan for quite a few years after that and that is assuming interest rates don't rise. The only danger is house prices rocketing up, thus raising the repayment value of the equity loan, but at the same time, the sale price of the house would go up, so I don't really consider this putting me out of money.

    I forgot to mention this actually - if we go for the new build, we are pretty much planning the same - overpay the actual mortgage and keep the govt loan ongoing as its much lower. So initially, whatever we save in getting a low mortgage rate will be used to overpay the outstanding principle thus making us bigger owners of our own property.

    We'll probably use anything on top as savings towards paying 10% of the govt loan back - and we will do that only if the markets havent shot sky high. If house prices go through the roof, I'd rather wait for it to come back down before paying an inflated 20% back to the govt ;)

    DV
  • lazer
    lazer Posts: 3,402 Forumite
    edited 9 October 2013 at 10:55AM
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    No but your credit file is rewarded for paying loans that you have took out ? so why not rent?

    Rent is paid in advance so is not credit - and would you trust a lot of letting agencies to report the data correctly?
    Weight loss challenge, lose 15lb in 6 weeks before Christmas.
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