Ref: Help greatly appreciated,

internetraver

Hi,

Could anyone help us please as we seem to be going round in circles and unsure what to do next, we do not have a lot of spare cash so are reluctant to use brokers/ financial advisors because of the costs involved and we dont know what to do next for the best.

We live in a council house that we have the option to purchase under the right to buy and can buy our home for £50,000 which has a market value of 94k and are joint applicants, when the council valued our home the person who valued it stated our house was a "timber clad timber frame" house and to check with mortgage providers as he said most banks are fine it is just building societies that seem to have an issue with lending on the construction type.

We have approached nationwide, halifax and natwest all of whom have said no based on it being timber clad timber frame - I have checked with the council and they state loads of other tenants have no issue with lenders and my neighbour who has an identical property to mine has his mortgage with the halifax he took out 5 and a half years ago and yet we approached them and they said no after checking with their underwriters.

Today I have gone back to the council to query why the house seems un-mortgagable and they have now told me they are not aware of anyone else having issues and stated it is "traditional timber framed clad house with external walls of timber and brick" but this is all the information they have given me on the type of house it is. Does this make a difference or am I wasting my time trying to find a suitable mortgage provider before I spend money on applications that we may not get, we also would like to borrow an additional 10 k for home improvements( new kitchen, flooring and double glazing) and between us earn just over 35k before tax the ltv is about 63-64% on borrowing everything we need. we have both scored about 840 and 909 on our experian credit check, we fall well within the affordability scale on our income.

the state of the house is in good condition and has been regularly maintained. should the council be giving me more detailed information on the construction name or does anyone know if the description they have given me is adequate as mortgage providers are taking on average 3-4 days as they have to check with the underwriter etc...

Any help would be gratefully appreciated as we are 5 weeks into a 12 week time line to give the council an answer in whether we can buy or not and we would dearly love to be able to buy as it is actually cheaper for us to buy than it is to rent so could anyone offer any help at all please.

ACG

To be completely honest, its a case of calling round the lenders like you have been doing and checking whether they will accept it prior to making any applications or speaking to a broker to let them do it for you. Dont limit yourself to banks though, do try building societies if you are going to do it yourself - if there is a local building society they may be more lenient towards it.

The information alone should be enough and it does sound like its not an uncommon build type for the area so im sure there will be a lender for it.

Past lending (in the form of your neighbours mortgage) is not an indication of future lending practices so it could be that halifax have changed their stance.

amnblog

Sorry to be direct - but if you cannot afford sensible advice on this purchase you are best not to buy.

kingstreet

internetraver wrote: »

we do not have a lot of spare cash so are reluctant to use brokers/ financial advisors because of the costs involved

When do you think you would pay for the advice and arrangement of a mortgage by a whole market broker?

We don't charge you upfront then just chuck enough mud at the wall and hope some sticks. That's the trick of those who sit in bank and building society offices who demand you traipse in there between 9 and 5, five days a week...

This job is about preparation, experience, research and attention to detail. A good whole market broker is essential in finding you the best lender and the best rate for your individual case.

ACG

kingstreet wrote: »

When do you think you would pay for the advice and arrangement of a mortgage by a whole market broker?

We don't charge you upfront then just chuck enough mud at the wall and hope some sticks. That's the trick of those who sit in bank and building society offices who demand you traipse in there between 9 and 5, five days a week...

This job is about preparation, experience, research and attention to detail. A good whole market broker is essential in finding you the best lender and the best rate for your individual case.

Or work for large chain estate agents.... apparently

internetraver

many thanks for the all the comments, does anyone know of the kind of costs involved with broker, financial advice, thanks

ACG

It could be anywhere from £0-1000. Depends on the broker really.
I would expect to pay no more than half of that, if you do pay only pay on offer or completion - not application.

internetraver

thanks ACG, I have tried a few more lenders but they all want you to pop in the branch or book a mortgage appointment, or to arrange a call back with a mortgage advisor. I think we may need to use a broker so thank you for your valuable advice on brokers

Mokka

We've been in a similar situation, as our RTB flat is in a tower block and these are notoriously difficult to mortgage.
As we were not pressed for time (our council is ridiculously slow) I've done a lot of research myself and decided to try the direct access lenders first, before approaching a broker.
So if you want to use a broker, which will save you a lot of time and work, ask them if they will look at direct access lenders, and if so, how would they charge for this- they will not be able to apply for you to these type of lenders, just give you advice.
Or approach them yourself first to find out what deals you can get.
Direct access lenders are:
HSBC and First Direct
Tesco's
Post Office
ING (now Barclays Direct)
I think also for the time being TSB, although they will be opening a service for intermediaries soon.

You need to know exactly what the construction of your house is- find out from the council or even better get a survey done. If you are buying a freehold you MUST get a survey! If the survey shows up something untoward you can re-negatiate the price with the council.You can then take the survey to the lender's underwriters, so they know exactly what they are dealing with.
Do not speak to anyone else at the bank/ BS than the mortgage advisor, or you are going to waste a lot of time. I've been told several times by the front of the house staff that I can't get a mortgage on our flat, only to be accepted by the underwriters weeks later (I was obviously very persistent).
If you are not happy with the deals these lenders offer you can either speak to a broker or start researching lending criteria of various lenders yourself, which is rather tedious.
We have used the difficulty to get a mortgage for our flat to get the price of our flat down. Is it possible that your property is overvalued? If you were selling it is it most likely that only a cash buyer would be interested? You can only know for sure if an identical property in your area sold recently (or in your case at the time of your RTB application).
If your property is overvalued you can get it re-valued by the District Valuer (obviously it's a risk as the price after the re-valuation can go up rather than down) but it will significantly delay your RTB process.
As for affordability you need to think long term: what rise in interest rates can you afford? What about substantial repairs you will have to finance yourself?
If your budget is that tight maybe buying is not such a good idea.
Whatever you do, do not buy without getting a survey done!

getmore4less

my neighbour who has an identical property to mine has his mortgage with the halifax he took out 5 and a half years ago

Ask them to get their paperwork out and see what they said the construction was