Declined at DIP- advice for going forwards..

poppy_seed

Hi,

I have been reading these boards for a few weeks and thought I should probably ask for some advice on our situation please.

My father in law helped us in 2010 by buying us a house by getting the mortgage in his name as I was a student and my hubby was bankrupt in 2009 (discharged 2010, completely off his file this month).

So now we are ready to buy our first home together and we intend to use the HTB equity loan towards our purchase. We clearly applied too early but the broker suggested it would only be a soft search as part of the DIP as the house we wanted was likely to go. It has now.

Our house is worth 270,000
existing mortgage: 153,750
leaving 117,000 towards the new house.
New house (a new build obviously, there will be more) 339,000
HTB deposit: 67,800
LTV: approx? 55%

My income: £20k (perfect credit history)
Hubbys income: £25 (bankruptcy 2009, default 2009, 2 missed payments in 2011).
3 children.


So now we need to do everything possible to improve our chances for in a few months time...

We have a 4k loan and 4k cc which will both be cleared once we have released the money from the house sale. So would it be better to sell the house and release the equity to clear the existing debt and apply again or is it best to stay put for now as we have been here for 5 years?

The developers won't allow you to make an offer unless you have an AIP and sold your house. Now it may be too risky to sell up but we will find a mortgage, surely? Or not? Especially once that bankruptcy falls off in a few weeks (which will know we still declare).

Any advice will be greatly received.
Many thanks

amnblog

and the broker says...?

nuzik

the three children wont mean you cant get a mortgage that will just reduce the amount you can borrow.

I assume he has cleared all the debt from the bankruptcy and the defaults? Have you got his credit file? If he just expects all this to go away after 6 years it won't. A decent broker will be able to help and so do some of the highstreet lenders but usually they want to know why someone went bankrupt and how what they are doing now.
What were the 2 missed payments in 2011 bearing in mind he was bankrupt?

poppy_seed

amnblog wrote: »

and the broker says...?

He said we should try again in April.

I asked if Nationwide gave a specific reason for the decline so we could try and work on it but he hasn't replied?

So two weeks later I'm looking for some advice.

poppy_seed

nuzik wrote: »

the three children wont mean you cant get a mortgage that will just reduce the amount you can borrow.

I assume he has cleared all the debt from the bankruptcy and the defaults? Have you got his credit file? If he just expects all this to go away after 6 years it won't. A decent broker will be able to help and so do some of the highstreet lenders but usually they want to know why someone went bankrupt and how what they are doing now.
What were the 2 missed payments in 2011 bearing in mind he was bankrupt?

Hi, thank you for your reply.

Yes it's all cleared. He has a 0 on his credit file. Its strange because with experian he is scoring very very well, yet with equifax it is very poor because that bankruptcy court info is still on there. We know it will always affect us so he's not expecting anything, we are just asking for advice. I have known someone to get a mortgage only two years after a bankruptcy order, albeit at a higher rate and something I wouldn't want to consider which is why we have waited much longer.

The missed payments were from a switch of bank accounts, I think?

I think I'm predominantly asking if its a crazy idea to sell up and be in a better position financially and presenting as FTB's or would the move into a new property within a month or two of applying not look very secure?

Thrugelmir

A total mortgage exposure well over £220k ( i.e. including HTB deferred loan) looks unaffordable to be frank.

As you've debts. I assume you have no savings to fund the move. So costs will also be funded out of the equity.

cns06

I don't think you will qualify for HTB using your equity. I am in a similar position and was advised the lenders don't want to see large deposits from customers. I made an enquiry (via a broker) about 25% HTB, c.25% from my equity meaning LTV 50% ish. Answer was - approval unlikely.


If anyone knows different I am all ears!!!

kingstreet

cns06 wrote: »

I don't think you will qualify for HTB using your equity. I am in a similar position and was advised the lenders don't want to see large deposits from customers. I made an enquiry (via a broker) about 25% HTB, c.25% from my equity meaning LTV 50% ish. Answer was - approval unlikely.


If anyone knows different I am all ears!!!

As long as your mortgage is at least 25% of the purchase price, you can put down as much deposit as you like.

The HTB Agents have no interest as long as the case fits the parameters;-

Upto 4.5 x income
4.8% mortgage rate used
debt to income ratio upto 45%
min 5% deposit
min 25% mortgage.

Speaking to an experienced newbuild broker who does such cases all the time would be a good idea.

cns06

Thanks will look into it some more now !!

kingstreet

I notice you mentioned lenders, not the HTB Agent.

I know of only one lender NatWest which has an issue with deposit on HTB - EL and it says maximum 20%.

Others have no issue.

amnblog

Sounds to me like your broker is saying they do not know how to take it further.


Find another one.