Help to Buy EL affordability?

airyfairy76

Hi all - am a little confused and thought I would see if anyone on here can advise.

I reserved a property with the plan to use the Help to Buy equity loan scheme - I earn £37k (plus bonus but not really needed in calculations so won't confuse matters!), the property is £190k so would need a mortgage of £142.5k.

Santander have DIP'ed as a H2B mortgage, yet my broker has just heard from the H2B agent that they have refused me on affordability? My debt to income ratio (using one of their calculators) is 37% (I have one £133 a month loan, and no credit card balance) so really am at a loss as to what they have calculated? I didn't include bonus payments (last year £3.5k) and over estimated service charge even - do you think it's a mistake? I thought they looked for 45% or under - am I wrong? Sorry to ramble, just a little upset!

kingstreet

The HTB affordability calculator works off;-

min 5% deposit
max term to age 70
max income multiple 4.5 x
mortgage rate of 4.8%
max debt to income ratio 45%.

Did the broker run the HTB calculator and lender calculators at the same time and ensure both fitted?

airyfairy76

Okay, after doing some more research I have learnt that they calculate affordability from a "standard variable rate". Their calculator i used from here has a figure of 4.8%, but I don't know when this was last updated. I have done calculations up to 5% and it is all still hunky dory - does anyone know what rate they are currently using for affordability?

airyfairy76

kingstreet wrote: »

The HTB affordability calculator works off;-

min 5% deposit
max term to age 70
max income multiple 4.5 x
mortgage rate of 4.8%
max debt to income ratio 45%.

Did the broker run the HTB calculator and lender calculators at the same time and ensure both fitted?

Thanks Kingstreet - you have answered my question :-) I haven't spoken to him yet as he emailed me late last night, so I will catch up with him today. I know when I reserved the property, the builder made me run the affordability check with one of their brokers with no problems, so it's all a bit of a mystery.

At 4.8%, I come in at 41% including bonus (43% without) - I'm wondering if someone has made a booboo somewhere.

kingstreet

Ask for a copy of the PIF and compare it with what is really should say.

Run the affordability calculator yourself and see if anything turns red.

airyfairy76

kingstreet wrote: »

Ask for a copy of the PIF and compare it with what is really should say.

Run the affordability calculator yourself and see if anything turns red.

Done that already - no reds at all. Even hacked it and did it to 5% and came in at 43%. I will ask him for a copy today - he also said he was going to speak to the H2B agent.

Thanks Kingstreet!

airyfairy76

Update - all got sorted. Figures got checked and resubmitted and got the ATP through today. . That particular H2B agency couldn't even say why it had not passed in the first place.

Now onto biting my nails over mortgage applications!!