Shared ownership - refusal again

NinaSwiss

Hi Alice,
Just read this thread and just wanted to say well done on the new job. Finances aside, it really does bolster confidence.

On a seperate note, if you have an extra bedroom, you could consider renting it out. The rent a room scheme allows you to earn upto £625 each month tax free. Something to consider.

AliceBanned

NinaSwiss wrote: »

Hi Alice,
Just read this thread and just wanted to say well done on the new job. Finances aside, it really does bolster confidence.

On a seperate note, if you have an extra bedroom, you could consider renting it out. The rent a room scheme allows you to earn upto £625 each month tax free. Something to consider.

Thanks NinaSwiss. I agree it will be a confidence boost, much needed!


I don't have a separate bedroom but am considering moving to a two-bed place if I can afford it in the future and doing just that. With prices the way they are in the south east I may not be able to but I will definitely consider. I will have to see how my new commute works out as this will give me more flexibility on where I live as I won't be commuting to central London.

AliceBanned

Hello again


I realise that the decision re my flat/shared ownership may be made for me. I have just started looking into the lease extension as I realise it only has 84 years left at the end of the year.


I have just fixed the mortgage for 2 years and the plan is to stay for most of that, but make plans to move on after that.


The reason is, unless I own 100% I can't apply for lease extension! I presume letting the lease get lower than 80 years won't be a good situation at all. I also can't foresee staircasing to 100%. Maybe 80% at the most. At least a decision has been made really because I need to be in a situation which is sensible financially. As my new job doesn't require such close proximity to London I am more flexible on where I can live.


I feel sad about this as a love the area I'm in. I need to find somewhere fairly quiet still. But I can't see myself staying beyond 2 years and risk losing value on the property or not selling it easily (though it is in a very desirable area 30 mins to London and 5 mins to the station).


Any advice would be appreciated - I am new to leases etc.

AliceBanned

How time flies! I may need a bit of mortgage advice please before I go to a broker. My fixed rate finishes end October, as mentioned nearly 2 years ago. I have just done a soft application with Halifax and they are not offering me more than £100k total borrowing, which is not enough. I would need £150k, plus Help to Buy. My salary is £38,900.


There is a new development I have my eye on, asking price £265k for a 1 bedroom flat. My current SO flat is £230k approx. and I own 40%. I am getting a valuation done this week with a view to either staircasing to 100% or 90% (depending on affordability) or selling up and buying in the new development (lower than asking price, I would offer £255k and use Help to Buy. I have a deposit of £56k.


My debts are lower than in my signature and I am now repaying at £1k per month. Just for this final push. I think current debt stands at £9k on credit cards only.


My question is, should I go to a broker now, and get an agreement in principle or do an application to find out what my options are? Or if I do it now and don't fit the criteria for either of the above, I will then do another application in several months' time and this might have a bad impact?


The new development is not available until next summer but they are launching in July and I know there is a lot of demand for this type of property. Near to mainline station 30 mins to London, desirable area etc.


I am just tentatively approaching this all now because if I go for the new development rather than staircasing, I will need my place on the market soon. A neighbour's sold within one month so I am not concerned about it taking too long to sell, but of course we never know!

AliceBanned

I think I've just found what I needed. I did a search on a comparison website (soft search including adding my credit card debts and other details) and the highest mortgage would be £169k with Natwest. Lower with current lender, only £117k.


I forgot to add the term would be 15 years only to take me to retirement at 67.


So it looks like there is a chance I could purchase most of my current property or a new one and it is just a case of deciding what is the best next move for me. Financially it would be to stay where I am. I might be £10k short of the full asking price, but the valuation later this week or next will clarify.


I could staircase in two lots but that would be a bit annoying when only £10k short of the full amount.

kingstreet

NatWest won't do shared ownership.

On a newbuild HTB purchase, have you entered 3% of the HTB loan as an expense in affordability, along with ground rent & service charges?

Have you done the HTB affordability calculator;-

https://www.gov.uk/government/publications/homes-england-help-to-buy-equity-loan-calculator-and-guidance

AliceBanned

kingstreet wrote: »

NatWest won't do shared ownership.

On a newbuild HTB purchase, have you entered 3% of the HTB loan as an expense in affordability, along with ground rent & service charges?

Have you done the HTB affordability calculator;-

https://www.gov.uk/government/publications/homes-england-help-to-buy-equity-loan-calculator-and-guidance

Thanks Kingstreet. OK and I suppose few lenders do shared ownership so the SO option leaves me a bit stuck.

I have just looked at HTB calculator on Barratt Homes website and max loan would be £174k on the new build which would be sufficient with my deposit on top, plus HTB loan. I am not very familiar with HTB so no I haven't factored those in. Even that option looks quite difficult and I don't know how to factor in my debts?

AliceBanned

kingstreet wrote: »

NatWest won't do shared ownership.

On a newbuild HTB purchase, have you entered 3% of the HTB loan as an expense in affordability, along with ground rent & service charges?

Have you done the HTB affordability calculator;-

https://www.gov.uk/government/publications/homes-england-help-to-buy-equity-loan-calculator-and-guidance

PS I couldn't get the affordability calculator to work but will haveanother look. The link doesn't seem to work..

AliceBanned

The Surveyor valued my SO flat today and has to do a bit more research but thinks around £215-220k. This might leave me with the option to staircase to 100%. I think the housing assoc has to agree the price as it is an independent valuation and that is what they ask for.


My salary is £39k and deposit £48k so might be doable but with shared ownership mortgages and my credit card balances it could be still tricky. I will apply via a broker in July as I am expecting some overtime pay and can clear my overdraft and another credit card at that point.




The surveyor described it as 'a bit tired' and in need of some renovation hence the value. It is in a great location so ceiling prices is higher which is a good thing. just chatting to him he thought it might be a good time to buy and renovate it.


Some of the renovations are down to the freeholder/housing assoc eg windows' paint peeling and starting to rot a bit and they don't do anything about that. I can do the internal decor and even put in a new kitchen and bathroom at some stage If do manage to get 100% ownership.


I am just wondering whether 4.5x salary for mortgage is fairly standard?