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! '); //-->

Hi...the biggest problem you have got is the homebuyer scheme and not the IVA problem. The brokers you have spoken to are basing their choices on right to buy rules which are totally different from the scheme you need. I don't know what Abbey are playing at, all I can assume is that you have spoken to an unqualified adviser who knows nothing about their own criteria. If they have already completed one credit search you do not need another one to reduce your score even further?? Also where they got 5.63% from is anyone's guess, 80% products are well over 6%. I do believe that you would need to wait until at least 3 years have passed before a lender that deals with homebuy schemes is available. Keep us posted as to how the applications have gone though please.

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Regards

Ian

Thank you for your reply. When I phoned Abbey, I asked (a) do they accept key worker schemes (the one we are in grants a 17.5% equity loan which is repayable when the house is sold or the mortgage satisfied and not shared ownership) (b) do they accept first time buyers, and (c) would they accept someone with an IVA on record that had been settled more than a year. The answer to all 3 was yes, and the lady even consulted her manager regarding the IVA question.

She then took details of income etc and said that for an 80% mortgage, with a very bad credit history, they do a fixed rate mortgage for 3 years at 5.63% and its one of the best on the market right now. This rate does not change dependant on circumstances either. She then said that the decision in principle had been granted because our affordibility was really good.

Full application is tonight by telephone so we shall see what happens. I'm betting that as soon as they do a credit search they will reject us, but I don't know what Abbey's lowest acceptable credit score would be. Anyone know? Also, if you have a low credit score but really good affordibility then do they take both into account to make the decision?

Hi, I am new to the forum so initally Hi. However i am not new to the financial / mortgage sector.

As of recent i am sure you are aware applications are significantly down, therefore any clients not 'grade A' are having problems being accepted.

Your main issue is that the 17.5% is an equitable stake in the home, many would argue this but it is a charge on the Land Registry.

This was fine in a buoyant economy with rising house prices, however in the current climate your current 80% could well be 90% in 2 years time, i.e house price falls etc.

I wish you luck, but from my experience you may well struggle..