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

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  • Leon_W
    Leon_W Posts: 1,813 Forumite
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    A default is one of the worst. It shows that you have failed to pay a credit commitment completely. An arrangement to pay is probably viewed less seriously with "odd" missed payments being the least serious. It's all bad credit management though and lenders can afford to be choosy.

    Also, to add to kingstreets list, lenders look at your age, where you live, your occupation, marital status and god knows what else in order to make a decision. They are less likely to lend to a 19 year old, with a poor employment record, with 2 kids, a live in girlfriend and wanting to buy in a rough area than to a 30 year old single accountant who's worked for the same firm since school and wants to buy something that doesn't have graffiti up the side walls.

    There is much more to lending at 95% than just credit score.
  • liz545
    liz545 Posts: 1,726 Forumite
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    My OH and I are looking into this - as FTB we've saved up 15% as a deposit, but haven't yet got the ball rolling in terms of agreements in principle etc. He's keen on the HTB scheme, but I'm not so sure - it's new so I don't feel like I can really judge whether it's a good deal, or be sure we'd be able to afford to make repayments on the mortgage and on the loan element. I'm also suspicious, given the government's love of privatising anything and everything (like the student loans company), that we'd end up in a worse situation than if we just opted for a conventional mortgage. Am I just being ridiculous, or is it right to be cautious?
    2015 comp wins - £370.25
    Recent wins: gym class, baby stuff
    Thanks to everyone who posts freebies and comps! :j
  • BargainMad_3
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    Thank you for the non sarcastic response :j.

    Im finding it really hard to know what to do for the best - i have paid over £2000 worth of debts off the lift my credit file - when i could of opted for a lot lower settlement figures... I dont want to apply for mortgages as it looks bad on my credit file - but want to get things sorted - there is so much conflicting information everywhere.... dont know what to do

    There are going to be a lot of applications for the new HTB mortgage (Guarantee scheme) in the early days. This is because a great big head of steam has built up with lots of people with a 5% deposit in a market where only a few dozen 95% mortgages, invariably with higher rates.

    This new scheme will add dozens more 95% mortgages to the market, and ones which are far more affordable than now.

    There will be people with lots of different circumstances applying, including discharged bankrupts, so certainly people who have a far worse record than yourself. But with so many people applying they will be able to cherry pick the ones they want.

    When you apply a lender can do a "pre-lending" checklist before a credit check is undertaken. This can highlight any areas that need attention even before they run a search so it won't appear on your file.

    If you say to them "I am really interested in this product but before I make a formal application I want to ensure that I am eligible for it."

    If you keep it informal there is no need to be worried about possible rejection as you are not demanding anything just putting out feelers.
  • Lcyclayton9
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    Leon_W wrote: »
    A default is one of the worst. It shows that you have failed to pay a credit commitment completely. An arrangement to pay is probably viewed less seriously with "odd" missed payments being the least serious. It's all bad credit management though and lenders can afford to be choosy.

    Also, to add to kingstreets list, lenders look at your age, where you live, your occupation, marital status and god knows what else in order to make a decision. They are less likely to lend to a 19 year old, with a poor employment record, with 2 kids, a live in girlfriend and wanting to buy in a rough area than to a 30 year old single accountant who's worked for the same firm since school and wants to buy something that doesn't have graffiti up the side walls.

    There is much more to lending at 95% than just credit score.

    Do you think im best going to the appointment with natwest to see what happends then ? as im not 19 with 2 kids and graffiti on the walls.... im a 31 year old mother of 1 with a full time managerial position earning £32,000 a year with no outstanding debt and just want a chance to get my foot on the ladder so i can run up the bloody thing - and i will if i ever get the chance :(
  • Lcyclayton9
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    BargainMad wrote: »
    There are going to be a lot of applications for the new HTB mortgage (Guarantee scheme) in the early days. This is because a great big head of steam has built up with lots of people with a 5% deposit in a market where only a few dozen 95% mortgages, invariably with higher rates.

    This new scheme will add dozens more 95% mortgages to the market, and ones which are far more affordable than now.

    There will be people with lots of different circumstances applying, including discharged bankrupts, so certainly people who have a far worse record than yourself. But with so many people applying they will be able to cherry pick the ones they want.

    When you apply a lender can do a "pre-lending" checklist before a credit check is undertaken. This can highlight any areas that need attention even before they run a search so it won't appear on your file.

    If you say to them "I am really interested in this product but before I make a formal application I want to ensure that I am eligible for it."

    If you keep it informal there is no need to be worried about possible rejection as you are not demanding anything just putting out feelers.
    :T:T:T Thank you so much ! this is exactly what i will do on Friday... wish me luck !
  • Leon_W
    Leon_W Posts: 1,813 Forumite
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    Of course you should go along. If you don't ask you don't get. You are aware there is a problem, so it's not exactly going to be a big shock if they say no is it ? At least you'll know where you stand.
  • BargainMad_3
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    Good luck LcyClayton9 :)

    The bank will have seen a few people by then - including people with a far worse situation than yourself :)

    Let us know how you get on.
  • kingstreet
    kingstreet Posts: 38,851 Forumite
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    liz545 wrote: »
    or be sure we'd be able to afford to make repayments on the mortgage and on the loan element
    Are you talking about Help To Buy - Equity Loan, as there is no loan element on HTB - Mortgage Guarantee which is the subject of this thread;-

    http://yournews-legalandgeneral.com/pv_obj_cache/pv_obj_id_BB320F8298FC1120B8826B44DE0AD12E294C0800/filename/Help%20to%20Buy%20Definition%20Budget%202013.pdf
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • kingstreet
    kingstreet Posts: 38,851 Forumite
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    Do you think im best going to the appointment with natwest to see what happends then ? as im not 19 with 2 kids and graffiti on the walls.... im a 31 year old mother of 1 with a full time managerial position earning £32,000 a year with no outstanding debt and just want a chance to get my foot on the ladder so i can run up the bloody thing - and i will if i ever get the chance :(
    Use this to establish what you can borrow beforehand;-

    http://intermediary.natwest.com/tools/calculators/calculator.asp

    It'll give you an output at 90%, even if you put in 95%, so it's only going to be a rough guide.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • regbrown
    regbrown Posts: 71 Forumite
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    "help to buy" and then your screwed....

    This is ludicrous to encourage desperate folk into the housing market and lumping them with massive mortgages and potential huge time bomb.

    Martins concerns are the first I read about the problem. A two year fix and then what? That still leaves another 23 years of a mortgage to pay off at probably normal rates.

    This HAS to be addressed or we are going to lead to a massive problem from 2 years down the line.

    Ironically, this scheme is pushing up prices so contributing to the increased debt these people will take on board.

    As a relatively new home owner on a stable deal and income, even I have concerns about the future with rates and am desperately paying down as much as possible to avoid the "shock" coming.
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