Mortgage Nightmare!! Advice needed.

chillertwist

Hi

Having a complete nightmare trying to get a mortgage at the moment. Me and my partner are first time buyers and we have had an offer accepted on a property totalling £192,950. As my partner is a key worker, we have qualified for a 17.5% equity loan from the government through a scheme, and we have 2.5% deposit on top. Therefore, we require an 80% mortgage.

The big snag is this...... my partner had an IVA which was settled in full in April 2006 (although the certificate says October 2006 due to delays with creditors collecting funds). His credit score is shot to pieces and mine isn't a whole lot better (around the 645 mark).

We've had terrible trouble securing a mortgage and various mortgage advisors have been mucking us around. One advisor said he'd got a DIP for us from First National and this is what helped us secure the offer on the house. However, a second mortgage advisor from Charcol said that the DIP must be fake because First National do not accept key worker schemes. Can mortgage brokers make up a decision in principle!!??? Is this mortgage advisor dodgy? He hasn't charged us any fees and promised there wouldn't be any so why would he mislead us into thinking we had a mortgage lined up?

The advisor from Charcol has been trying to get us a mortgage with Future Mortgages but Future have an issue with the amount of time my partner has been out of his IVA. They want to go on the certificate date, even though my partner settled the funds in April. The advisor was meant to call me today but didn't bother so I guess thats another mortgage out of the window.

I got home today and decided to take things into my own hands. I rang up Abbey and somehow managed to get a DIP....but as yet, no credit check. A guy is ringing me tomorrow night to do the full application but i'm not hopeful because a mortgage advisor previously told us that Abbey wouldn't accept us. It seems Abbey have already previously carried out a search on my partners credit profile which isn't going to look good when they search again tomorrow. There is a slight difference in this new application though.......we only had the 17.5% equity loan when Abbey were approached previously.......and now we have an additional 2.5% deposit which only means 80% mortgage. It's a good rate too.....5.63% on a 3 year fixed is a lot better than 8.94% with First National!! I fully explained the IVA position and default on record when I phoned up and the lady said they shouldn't be a problem.........so why the problem previously? because we needed a higher LTV ratio?

My question is.......does anyone think that the application will actually go through....and if it doesn't, is it time to give up? Its such a shame because my partner and I haven't missed any payments on anything for over 2 years.

I hope someone out there can help or offer some advice! :A

posh*spice

Are you sure now is a good time time to buy? The market is almost certainly just about to drop - probably a great deal.

chillertwist

It's a case of now or never really. I'm prepared for the market to drop, because once it drops, the only way is back up. I just wish the situation with mortgages was better :-(

herbiesjp

1) Has the first Adviser told First National about the Key Worker scheme, as opposed to telling them you have a 20% deposit?

2) Charcol said the AIP must be fake! - it could be real, just based on incorrect information

3) Going direct to lenders in a situation like this can cause more harm than good, especially with a low credit score, and the more searches carried out the more impact it will have on your score, and more importantly how that will affect you with a lender's own scoring systems

I doubt anyone here can give any reassurance on the liklihood of your case progressing, as no one knows your exact circumstances. However, if you are not happy with your brokers so far, get in contact with a fee free whole of market adviser, be upfront with them about the other advisers, and see what they come back with. Be sure to specify that no credit searches are carried out until you have agreed on a deal

Conrad

I'm afraid to say it's very unlikely you will obtain a mortgage now.

Shared equity in it'self is a complexity, let alone with a poor credit history.

Lenders will consider the only accesiable equity available to them in the event of repossession is your 2.5%.
In a falling market that 2.5% will dissapear in a puff of smoke, and there there would be arreas, charges, balifs, courts costs, locksmiths etc, so lenders could end up 10s of thousands out of pocket should you get repossessed.

Really the only advice I can give is stay where you are, save, make sure you are on the electoral register, save some more, NEVER pay anything 1 day late, save some more and then try again once you have your own 10% deposit.

Good luck

chillertwist

I'm not sure if the first advisor told First National about the key worker scheme. He was fully aware that we were in the scheme so i'm unsure why he witheld that info from First National. I suspect that he said we had a 20% deposit, which means the DIP won't come to anything anyway.

I realise I could have done more harm than good by approaching Abbey, but it was out of sheer frustration more than anything else. We need to get things moving and the mortgage advisors don't seem to grasp the urgency of it all. I'm literally clutching at straws now.

I really don't want to get any more mortgage advisors involved. There have been too many fingers in the pie already and to be honest, not one of them have helped because we still don't have any mortgage lined up....or even on the horizon.

Mac_Sami

Let's spell it out.

You both have average to crappy credit histories.

You have an 80% LTV ratio, but to be honest your actual deposit is only 2.5%.

The property market is declining.

Why, as a bank, would I want to lend at a great rate to you?

Walk away. Save money. Buy later. No further discussion needed.

Excuse the bluntness. It's not meant to be rude.

chillertwist

I know the market is declining. Once we buy, we intend on staying there for a loooooooong time and will be able to ride out the bad market.

Timing is an issue for us too. We need to vacate our property by 31 July, and if we rent, there will be no room for saving and it will take even longer to get on the property ladder. I'm nearly 30 years old now, and I can't rent forever.

Everything has come together apart from this bloody mortgage, and I feel if we don't buy now, then it will be our downfall. When the market rectifies itself, house prices will go up and we will get less for our money.......and who knows if there will be any key worker schemes by then to help get on the ladder.

I understand why you are advising people not to buy right now......but there are some of us out there who MUST buy. Renting in our area (Bath) is sky high compared to anywhere else and we would be stuck doing that (unless 100% mortgages come back!).

I'm sorry for whining......desperate times I suppose.......

Gloster_Advise

chillertwist

I am personally placing 20-30 cases to Abbey on a monhtly basis alone. I am NOT going to even go there when it comes to whether or not they will do it for you. Abbey people would say "yes its OK etc etc..." until full underwriting and then they may throw it back at you. You would then have a bad impression of brokers as well as the Abbey!!

One chink of good hope, on 75% LTV and below Abbey are letting adverse go through on many cases. 80% with a recent IVA satisifed.....mmm I am not too sure.

Your deadline is very near and Abbey are relatively busy. I would cross everything if I was you and be prepared for the worst.

Regards
Si

chillertwist

Thanks, yes I think it's a case of keeping fingers crossed. I will let you know how it all turns out.

AliceBanned

chillertwist wrote: »

I know the market is declining. Once we buy, we intend on staying there for a loooooooong time and will be able to ride out the bad market.

Timing is an issue for us too. We need to vacate our property by 31 July, and if we rent, there will be no room for saving and it will take even longer to get on the property ladder. I'm nearly 30 years old now, and I can't rent forever.

Everything has come together apart from this bloody mortgage, and I feel if we don't buy now, then it will be our downfall. When the market rectifies itself, house prices will go up and we will get less for our money.......and who knows if there will be any key worker schemes by then to help get on the ladder.

I understand why you are advising people not to buy right now......but there are some of us out there who MUST buy. Renting in our area (Bath) is sky high compared to anywhere else and we would be stuck doing that (unless 100% mortgages come back!).

I'm sorry for whining......desperate times I suppose.......

I totally sympathise with you - I have finally found a decent mortgage broker whom I trust, through word-of-mouth recommendation, but have been messed around by two previous to that, and been given a DIP from Abbey which went nowhere. I am also a first time buyer and don't want to keep renting. There are some greedy brokers out there, who give you hard sell and then come up with nothing, tell you they can help etc etc and you end up waiting and wondering what is going on, but with me my gut feeling always told me something was amiss. I was surprised at the way I was treated; even being pressured to sign an application form that I had not seen the contents of, and when I asked to see it twice I was again pressured to sign it, but of course I refused.

I agree with you that it is ok to buy now if you are a first time buyer; I'm not at all worried as I'm wasting thousands a year on rent anyway, and it can't get much worse than that; in the long term property will always beat it.

If my recent application doesn't succeed (I also have bad credit in the past which I've also worked hard to correct) I will just have to wait a few months and try again, but sorry I can't suggest any answer, apart from don't give up, give it a break for a few months if necessary until the market starts to settle. It has to settle at some point. And can you move outside of Bath and rent more cheaply somewhere? I know how drastic it gets; I've even worked nightshifts at the weekend occasionally despite working Mon-Fri daytime. It's tough for first time buyers at the moment and I too am crossing everything and waiting until it get better.