HTB Phase 2 - Strict Lending Criteria

stevied3268

Hi All,

A Natwest mortgage advisor is due to ring us next week to start the mortgage application process with us on the new help to buy phase 2 scheme. However, ive heard Natwest are very strict with their lending. In fact i know someone who was denied because they went £50 into their overdraft! Is this really true?

Just for the record my partner and i have never gone into our current account overdrafts or defaulted on any payments through credit cards etc. We do however have a joint account we use just for bills etc and we nip into the overdraft for a day or 2 some months whilst my partner gets paid (last wednesday in the month is hard to forecast sometimes).

stevied3268

Forgot to mention that another couple I know had 1 cc default 6 months ago and was denied the scheme.

stevied3268

Anyone been through the scheme?

Senior_Paper_Monitor

With a cc default six months ago your 'friends' were never going to get HTB or any other borrowing above 75% probably.

£50 into pre-approved overdraft is, in my opinion, unlikely to be the sole cause of the other rejection BUT credit requirements are incredibly tight at 95 or even 90%

AndyGuil

I have seen references to people having to be squeeky clean on their record(s) in order to get HTB2 with a 5% deposit. I have also seen that having a 6% deposit has been looked upon significantly more favourably. I saw a figure showing very few people have been approved from those that have applied.

Gordon_Hose

AndyGuil wrote: »

I have seen references to people having to be squeeky clean on their record(s) in order to get HTB2 with a 5% deposit. I have also seen that having a 6% deposit has been looked upon significantly more favourably. I saw a figure showing very few people have been approved from those that have applied.

Where did you see this figure?

AndyGuil

Just the first link I saw on this.

http://www.ibtimes.co.uk/articles/523050/20131118/help-buy-uk-house-prices-rightmove-bubble.htm

kingstreet

I was saying this weeks ago;-

http://forums.moneysavingexpert.com/showpost.php?p=63549936&postcount=7

If you could get a 95% mortgage a few weeks ago, the only difference today is there are a couple more lenders offering them. The purpose of HTB - MG is to;-

- increase the availability of higher LTV mortgages

by the Government guaranteeing from 80%, upto 95%, using an indemnity fund paid for by the lender (and the borrower) by a levy on the mortgage rate.

It was not designed to offer lower rates and these are broadly in line with other 95% products freely available, nor was it intended to provide mortgages to those with credit issues or a lack of affordability.

IMHO this will have limited direct impact on the housing market, with hotspots growing where they would have grown anyway, even without the scheme.

Anecdotal evidence from brokers suggests Halifax is offering 95% to very few borrowers, with the DIP defaulting to 90% or even 85% in many cases. It will take a while before people appreciate this is not a giveaway.

Gordon_Hose

Cheers. I have an appointment to see a Natwest advisor tomorrow regarding a HTB2 mortgage.

That articles doesn't instill and hope! lol

stevied3268

Thanks for your input all and the article. Would you mind clarifying "squeeky clean" please? We have never defaulted on any payments, have 4/5 myself on noddle credit score and my partner has 5/5. I would assume i lost a point because i have 2 Credit cards with balances on???

Good luck Gordon Hose please update the post on how you got on/found the process.

Thanks

Senior_Paper_Monitor

Reasonable level of credit activity (showing you can cope with credit), some headroom (i.e unused credit) on what facilities you have and those facilities not being out of proportion to your earnings, actual borrowing not being anywhere near the level of your supposed deposit, not living in overdraft and preferably some paid off commitments (i.e completed loans) in the recent past. And absolutely no late payments, let alone default etc.

.... or better !


Please ignore the scores - its about data, data and, in particular, the data !