1st Time Buyer AIP

UtSD98

Hi Everyone,


Please bear with me as this is a complicated, lengthy post!


My partner and I have applied for a Help to Buy equity loan and a first time buyer mortgage. We have been using a broker and have been given an AIP from Natwest.


However, I have some concerns about our application:


1.) My employment is based on 2 jobs that are 0 hour contracts. Hours are regular and have been consistent for over 2 years, payslips for this period can be shown


2.) Even though my credit score is very good with no adverse credit, my partner's is not. He has 2 (recently discovered) defaults from 2012 for £620 and 2013 £200. Both defaults are registered to an address that he shared with an ex partner, and he did not receive any notifications of the defaults, we only discovered them recently when we checked our credit history for the first time.


This is where is gets messy - the default for £200 was linked to an overdraft that was part of a joint account he held with the ex partner. As the debt was not paid, it was sold to a debt collection agency. We contacted the agency to try and immediately settle it, however they declined to let us do so as the debt was sold in the ex partner's name and cannot be settled without her permission (data protection).


We escalated the situation to the financial ombudsman who contacted the company to try and rectify the situation, and it has taken 6 months (!) for them to finally allow us to pay it.


The £620 default is currently unsettled, however we have made arrangements for this to be also paid.


The broker has said that the defaults haven't caused an issue and the AIP is in place. I know that they only stay on a report for 6 years and they are both over 4 years old, however from reading other threads I am sure that this will affect NatWest's decision?? My partners credit history for the last 4 years since these incidents has been good without any further problems.


My questions are:


1.) How likely is it that we will actually get accepted for this mortgage?


2.) Are there any "sub prime" lenders that offer help to buy 75% LTV mortgages with old adverse credit and an applicant who has a 0 hours contract (I do not hold out much hope!) if the Natwest application fails?


I am really concerned about this as the house sale is progressing and I can't help but think I'm getting excited just to have everything come crashing down.


Thank you to anyone that can offer me any advice.

Royster82

Best people to speak to would be a mortgage advisor mate and take some professional advice, I always think how a bank would see it and try to see it from there side.

I know you say you have a good deposit but your on a 0 hrs contract so at any one time you could be out of work with a mortgage to repay, can anybody like a family member be a guarantor some banks accept this,, then you have two defaults on record from what I've read in other threads, it's not a deal breaker with some but again a mortgage advise will be out to help you with that.

I think the deal breaker in the whole thing will be if a mortgage company would be willing to take what would seem a high risk with no guaranteed hours, hopefully there is one out there but if there is you may well get higher interest rates Applied

usman330

I would reccomend using a mortgage broker who will know the market and know what each individual lender looks for. Most brokers will not charge you anything but they will get a commision from the lender once your mortgage is approved.

An AIP from my knowledge is a basic check, for a proper application I think they do dig deeper and are more stringent. If you have passed an AIP I think you have got a really good chance of getting accepted though.

erin110

They will pick it up at application and then your case will be declined. Your first port of call is telling your broker who should then speak to Natwest about it and see if they can consider it as an exception. If not, move on.


If you broker knows about this and hasn't told Natwest. You do not have a great broker. You wont be happy when it gets declined.


I have had this happen to me before where a client did not disclose a historical default it passed at AIP with Natwest but after the application went through they started to underwrite it, it declined. Natwest said they would have done it should they have been upfront and honest.

UtSD98

This is my concern - the broker is aware of the adverse credit, so why are we making an application with a lender that is unlikely to accept us? She seems to believe that it won't be a problem.


Are there any lenders that are part of the Help to Buy equity scheme that we would have a chance of being accepted with if Natwest decline? Otherwise, what would you suggest our best option is - would it be better to wait 14 months for this adverse credit to drop off?

kingstreet

On which version(s) of your credit file does this adverse data appear?

UtSD98

The default from 2013 is present on all 3 versions of my partners report, however Experian does not show the 2012 default, only the £200 default from 2013.

UtSD98

So it shows as follows:

Equifax - default from 2012 and 2013
Callcredit - default from 2012 and 2013
Experian - default from 2013 only

erin110

The issue is, the decision in principle will ask your broker if you have any defaults, ccj's etc etc. If your broker says yes then she will have to declare them and it would refer or decline but by the sounds of things she hasn't done. If a broker knows of something but doesn't declare it then that is wrong. It seems like your broker is winging it.


As for recommending a lender I wouldn't be able to do that on this website. I would contact a new broker ideally one that charges a fee as usually you get what you pay for. Before you do anything though PAY OFF THE DEFAULTS. Your already in a limited market with you requiring the help to buy and the types of lenders that offer it don't take unsatisfied defaults. I may be wrong there may be a niche lender out there but if I was a lender I would be sceptical lending to someone who needs to use the help to buy scheme and has outstanding defaults.

jessnat995

ok so you have me worried now,
I have 2 defaults that are paid from 2014 and one form 2013 unpaid, which was disclosed to my broker,
we received an agreement in principle from the lender and passed it, now if they didn't accept the open default surely the AIP wouldn't have passed right?

UtSD98

I'm not so sure which is why I'm panicking so much myself - from what I've heard an AIP only does a soft search of a credit file, its only afterwards at full application they pick up on items on the report (i may be wrong, please correct me if that's the case.)

The 2013 default is settled, we have all relevant paperwork for it. Instead of using the payment plan for the 2012 default is it best to pay it in one lump sum right in the middle of a mortgage application? Because surely it won't show as satisfied on the report when they look at it?

If this application fails and we lose this house, if we were to settle the outstanding default straight away what is the recommended length of time we would be able to try again? I know that one of the defaults drops off next year, but is there a chance in say 6 months time we could try again?