First time buyers, help to buy, precise mortgages.

nowhereboy

Good morning!

Me and my partner have recently received a DIP and reserved a new build home. We have less than perfect credit history and expected to be declined. we applied to get a little insight into what needed to be done so we could sort ourselves out to buy a home next year. Being approved for a DIP has came as a surprise but due to limited availability on our dream home we have decided to go forward with it.

We live separately, both work full time and have a joint income of just under 40,000. We have a gifted deposit and the house value is 170,000. The help to buy scheme of course meaning the government will loan 20%.

I have two loans, one car loan (in positive equity) and a loan with 118 which will be finished in 4 months. My partner has one credit card with a balance of about 800.00 and a car loan. The original plan was to wait until the 118 loan was settled, sell my car and pay off the loan/credit card before moving forward but my partner lives in a rough council estate and we are keen to get her and her son out of the area asap.

I have one default for the value of 300.00 within 24 months and one late payment within 24 months (stupid mistakes), my partner has a CCJ from 2015. Despite being up to date on all payments we have low credit scores of 550 on noddle. I have no history of paying rent due to living with parents.

Due to this our broker arranged a DIP with Precise mortgages. Our homes adviser and broker are treating this as a done deal and want us to meet the builders and pick kitchens etc but to us this all seems a bit premature. Our mortgage adviser got us the DIP within about one hour and only took basic info, income, debts, defaults. No questions about overdraft usage, monthly outgoings etc.

We have since done our own research and noticed precise state in their Terms/conditions that "we will not consider applicants who have received housing benefit within 12 months". My Partner received this for a period of 3 months when she moved into her current council home about one year ago. Surely if this was going to be a problem our mortgage adviser would have asked the question when I explained my partner is a single parent and claims benefits etc?

My bank statements are also less than desirable as I use my £400 overdraft every month and went overdrawn by about 7.00 within the last three months. My car is a modified/performance orientated and consistently eats away at my disposable income, this is easily resolved but it will show on my bank statements.

We will raise this with our broker tomorrow and highlight our concerns, I know it's impossible to know the outcome here but I'd like some honest and realistic advice. We can comfortably afford mortgage repayments/outgoings when combining our wages and within a few months once loans are cleared we will be very comfortable but I'm concerned about our chances of getting accepted in our current situation and don't want to start throwing money at people if this is all going to crumble down around us.

Nobody but ourselves seem concerned at this point, should we be?

GoingOn30

Yes I think I'd be concerned in your shoes too! Exactly what have you signed up for with the developer? When do you have to have applied for a mortgage/instructed a solicitor by?

nowhereboy

We have placed holding deposit on the house and I believe they would like exchange of contracts within 28 days (we reserved on Saturday). The home sales person states the solicitor will contact us soon. I'm not comfortable to hand over any money to a solicitor until we have a reliable DIP.

I have contacted our broker this morning and informed them of the housing benefit issue, we have now been told this is a flat out decline with precise. I'm pretty upset with the broker as ultimately this has only been established because I had my doubts about their DIP and checked precises criteria myself last night. Whats even more absurd is that the broker still failed to ask us more questions about our circumstances and told us not to worry and he's went off to get another DIP, supposed to call us back within an hour and two hours later we've just received a call stating he is trying with someone else but they have referred it and he will have an answer from them tomorrow.

Pending the result of this I think we are going to another broker, I have spoken with "simply adverse" and they have immediately requested copies of credit reports, asked about benefits, asked about our bank statements/overdrafts etc, I feel like they will check things properly before applying for any DIP's and any offer with them should be more realistic as a result. They have reassured me that they will not apply for any DIP's without our authority but will go through everything and tell us if they think we should apply for one.

This has turned into a pretty stressful situation, we really don't want to loose the house but at the same time I'm starting to feel like we would be better off giving it 6 months and trying again now we know how it all works a bit better. This would give us time to get everything in order and clear debts off first etc.

Only 3 days into this and myself and partner are stressed out our minds, it's going to be a bumpy ride.

GoingOn30

What will be the penalty if you withdraw your reservation with the developer at this stage?
It's probably best to be open with them when they open tomorrow and say things are not looking good for you mortgage wise and ask them if they can be flexible with the 28 days, as it looks completely unrealistic for you at this moment.

nowhereboy

We are only set to loose £90 at the moment, we gave a £500 reservation fee but get £420 back. We should have a better idea of our chances tomorrow after speaking with a broker who actually knows what they are talking about. It's not really about loosing the money, I'm not too worried about that, I don't want to loose the house and don't want to start paying out more money for solicitors etc and continue to get my hopes up.

I'm hoping someone in the know could give us some ideas on our chances of finding a mortgage, these "adverse credit" providers advertise being able to get mortgages for people with way worse history than ours and I've saw people on here have success in much worse situations, so I'm not giving up hope yet but at the same time I'm not confident either.

I will wait and see what "adverse credit" say tomorrow after we email them copies of credit reports etc, they seem confident they can find us a mortgage providing we have told them everything. We have since spoke to a few people from the estate who used the developers recommend mortgage advisers and they have also given up with them and went on to find their own, it seems we are not the only ones having problems with them.

amnblog

As you say, Precise Mortgages won’t do this case where there has been Housing Benefit received in the past 12 months.

Raise this with your Broker tomorrow.

nowhereboy

Thanks. I have already raised this, the broker spoke to my partner and quickly stated he would try somewhere else as precise won't accept this but he still failed to ask her any detailed questions about our financial situation. He is now waiting for a decision from another provider and will find out tomorrow.

The problem is I have lost trust in our broker and feel like he is blindly trying anyone without checking the criteria and making sure we are applicable first. Surely a broker should collect ALL our information, overdrafts, outgoings, benefits in great details before sending off for a DIP?

As a first time buyer I was not knowledgeable about what is relevant information etc, so I trusted our broker would ask the relative questions and closely examine our situation before moving forward. Instead I have had to educate myself and do my own research that ultimately stopped us applying for a mortgage that would have been declined, surely this isn't the way it's supposed to be done? I don't want another DIP that is not worth the paper its written on because they haven't checked everything first.

To make matters worse this broker was congratulating us on our acceptance and treating it like a done deal with nothing to worry about.

How do I know the next DIP is going to be worth anything if obtained in this manor?

Am I being unreasonable here?

amnblog

If you are not comfortable engage a different broker.

nowhereboy

That's the plan.

Obviously you work in the industry, do you believe we have a chance at finding a mortgage?

1 default a year old, 1 CCJ 5 years old. Slightly exceeded overdraft on my part once in three months and partner claimed housing benefit. partners Bank account is perfect and always has disposable money in it. All current loans etc up to date with no missed payments on them.

amnblog

What was the default in connection with?

What was the actual figure?

nowhereboy

My default was with a credit card (stupid I know), value was only 297.00. This did not default due to financial struggles and more to bad management on my part. It defaulted 15 months ago but is nearly cleared now. It may also be worth mentioning my overdraft was exceeded due to a 31 day month and DD being requested a day before wage went in, DD date has since been updated. I've double checked and this happened in January (not within 3 months like I stated).