Married couples must now submit joint applications for new help to buy equity loan scheme

Lil_lou_91

Since the start of November 2020, I have been in the process of buying a new build property. This came about from the property I rented being put up for sale by the landlord and we didn’t have the required 15% house deposit to put in an offer on a house that isn’t in the new build scheme. Mortgage rates and deposits are really high at the moment due to COVID. Using the help to buy equity loan scheme seemed like only way we could get on the property ladder.

As we are both first time buyers, it was explained by both the developer and our mortgage advisor that we were eligible to use the new help to buy equity loan scheme to enable us to buy with a 5% deposit, with the Equity loan making up the remainder which would make the process a lot quicker.

As part of this process, we found my husband has a poor credit history I’d been advised to apply for both the help to buy loan and the mortgage in my name only. It was explained that this is a fairly common practice in the industry and despite this reducing the amount we were able to get, we were happy to proceed as we just wanted to get on the ladder before we had to move from the rental, in the wider scheme of things it means the House and Mortgage is more than comfortable on my full time salary alone, let alone two. 

We had to wait until 16th December to submit my application for the help to buy loan as the government were closing the old scheme and reopening the new. I was contacted on Friday to find the application has been rejected because married couples have to submit a joint application under the new Equity Loan scheme. This in turn has invalidated our agreement in principle with the mortgage companies who won’t allow a single application when two names are on the loan element. This has come as a surprise to all parties involved in helping me, this would not have been an issue last year when married couples could apply individually.

It feels like the new scheme has caught the mortgage industry out and we are the people that the help to buy scheme is surely designed to help out, yet young married couples with good full time jobs in our scenario are not being catered for. At the moment we are in real danger of losing the house we’ve reserved, and will set us back 12months+ being able to save the roughly £20,000 more cash equity that we will need without the scheme, all the while looking for new rented accommodation and the costs that entails.

Has anyone else encountered this problem with the new help to buy equity loan scheme?

Seashell517

https://forums.moneysavingexpert.com/discussion/6226876/government-first-time-buyer-scheme-married-sole-application#latest

Carl2510

Think you just need to knuckle down save as much as you can at the same time get your partner to sort there credit out.

Marvel1

Lil_lou_91 said:

Since the start of November 2020, I have been in the process of buying a new build property. This came about from the property I rented being put up for sale by the landlord and we didn’t have the required 15% house deposit to put in an offer on a house that isn’t in the new build scheme. Mortgage rates and deposits are really high at the moment due to COVID. Using the help to buy equity loan scheme seemed like only way we could get on the property ladder.

As we are both first time buyers, it was explained by both the developer and our mortgage advisor that we were eligible to use the new help to buy equity loan scheme to enable us to buy with a 5% deposit, with the Equity loan making up the remainder which would make the process a lot quicker.

As part of this process, we found my husband has a poor credit history I’d been advised to apply for both the help to buy loan and the mortgage in my name only. It was explained that this is a fairly common practice in the industry and despite this reducing the amount we were able to get, we were happy to proceed as we just wanted to get on the ladder before we had to move from the rental, in the wider scheme of things it means the House and Mortgage is more than comfortable on my full time salary alone, let alone two. 

We had to wait until 16th December to submit my application for the help to buy loan as the government were closing the old scheme and reopening the new. I was contacted on Friday to find the application has been rejected because married couples have to submit a joint application under the new Equity Loan scheme. This in turn has invalidated our agreement in principle with the mortgage companies who won’t allow a single application when two names are on the loan element. This has come as a surprise to all parties involved in helping me, this would not have been an issue last year when married couples could apply individually.

It feels like the new scheme has caught the mortgage industry out and we are the people that the help to buy scheme is surely designed to help out, yet young married couples with good full time jobs in our scenario are not being catered for. At the moment we are in real danger of losing the house we’ve reserved, and will set us back 12months+ being able to save the roughly £20,000 more cash equity that we will need without the scheme, all the while looking for new rented accommodation and the costs that entails.

Has anyone else encountered this problem with the new help to buy equity loan scheme?

Doesn't sound difficult to save for a higher deposit

Lil_lou_91

Marvel1 said:

Doesn't sound difficult to save for a higher deposit

Hopefully, the plan is to save, save, save! It's just annoying that this wasn't flagged to us at the start of the process. We've paid solicitor fees and a reservation fee which I doubt we'll get back now.  

Carl2510

Lil_lou_91 said:

Marvel1 said:

Doesn't sound difficult to save for a higher deposit

Hopefully, the plan is to save, save, save! It's just annoying that this wasn't flagged to us at the start of the process. We've paid solicitor fees and a reservation fee which I doubt we'll get back now.  

Be thankful you haven’t exchanged.