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Opinions on this...
jamief
Posts: 303 Forumite
A Company called Miller Homes is currently running a deal called MiWay
For example, one of the houses we like is £265,000. Under this scheme, we would pay 75% (198750), with the balance (in % of the sale price) taking the form of an interest free loan, payable after 10 years.
To me, this sounds ideal for me and my fianc!e. We have a deposit of around £15k-£20k depending on how much our own house sells for, so we would in essence need a mortgage of £178750 - £183750, based on our combined salary of £57000.
For example, one of the houses we like is £265,000. Under this scheme, we would pay 75% (198750), with the balance (in % of the sale price) taking the form of an interest free loan, payable after 10 years.
To me, this sounds ideal for me and my fianc!e. We have a deposit of around £15k-£20k depending on how much our own house sells for, so we would in essence need a mortgage of £178750 - £183750, based on our combined salary of £57000.
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Comments
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And in ten years you'll have an albatross round your nexk. How do you pay off that loan then as opposed to now?
Chances are you are just storing up problems for yourself.
How much are you saving a month now? Can you just save up for a bit longer?0 -
poppysarah wrote: »And in ten years you'll have an albatross round your nexk. How do you pay off that loan then as opposed to now?
Chances are you are just storing up problems for yourself.
How much are you saving a month now? Can you just save up for a bit longer?
Well, I think it's very very unlikely we'll still be there in 10 years. If we sell before then, 25% of the value of the house goes back to Miller Homes.
If we were approaching the 10 year period and were still there, we'd probably just look at re-mortgaging to pay off the balance with Miller Homes. Both my fiancee and I are in fairly stable careers (she's a Lawyer and I'm a Software Engineer), so salary increases are fairly regular.
Saving up the 25% of £265,000 at the moment isn't really an option just now, nor does it really make sense to me, given that the loan is 0% for ten years.0 -
But it's ok that house prices are so insanely high that you two who are in good jobs can't afford to buy 100% of a house?0
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poppysarah wrote: »But it's ok that house prices are so insanely high that you two who are in good jobs can't afford to buy 100% of a house?
I'm not quite sure what you mean?
We can afford a house (we have a house just now). We could afford to repay upto about £1500 per month from our combined salary.
This scheme would let us get a bigger house now, avoid having to "upgrade" in 2-4 years, and enable us to get a good rate on a mortgage.
I'm trying to find out if there are any "catches" or anything we're missing.0 -
Ignoring selling your house - how much deposit have you saved yourselves?0
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poppysarah wrote: »Ignoring selling your house - how much deposit have you saved yourselves?
The deposit we have saved is in our current house. Circa £25,000.0 -
The deposit we have saved is in our current house. Circa £25,000.
So the reality is you don't have any deposit until you sell the house....
selling a house when house prices are coming down when mortgages are difficult to get hold of for people with less than 10-15% deposits
i think you'll find that as each month passes your deposit will be eaten into as you have to keep dropping the price to sell.....now is not really a good time to sell espeically if your using whatever you make as a deposit.
I'm not saying houses are not selling....just very very slowly!!
And shared ownership is a con! simple as that and there are only a few mortgages companyies that will lend for them
you may THINK your getting a good deal but ubkess you check all house price figures in that area i think you'll find your paying over the odds for even 75%If you find yourself in a fair fight, then you have failed to plan properly
I've only ever been wrong once! and that was when I thought I was wrong but I was right0 -
Okay - I'll address your points
1) Houses in my area (North East Scotland) are coming down, but very slowly. We paid £135,000 for our house 18 months ago. Our next door neighbour (adjoining semi) sold for £140,000 about 5 weeks ago.
2) We spent several hours last night looking at other houses in the same price range - (£250-275k). They were all of comparable quality and size / location. Also, this MiWay scheme has only been launched within the past few weeks; the houses have previously sold at these prices (given by the fact there are 10-12 similar houses on the same development with families in them).
If the scheme isn't shared ownership (as detailed in the link in the original post), why would a mortgage company have any objections to this?
EDIT: Also I think you'll find the deposit that most people use is formed from the equity in their current property.0 -
Yes i understand that but you'll be in a stronger position if you had savings aswell to backup the money you make from selling your house....lets just say you don't make 25K from the selling of your house what are you going to do then??Okay - I'll address your points
1) Houses in my area (North East Scotland) are coming down, but very slowly. We paid £135,000 for our house 18 months ago. Our next door neighbour (adjoining semi) sold for £140,000 about 5 weeks ago.Yes Scotland is slower BUT house prices are still dropping so is and will eat into your deposit
2) We spent several hours last night looking at other houses in the same price range - (£250-275k). They were all of comparable quality and size / location. Also, this MiWay scheme has only been launched within the past few weeks; the houses have previously sold at these prices (given by the fact there are 10-12 similar houses on the same development with families in them).You don't have to convince me...at the end of the day the mortgage company will decide if its the right price...not the developer or you
If the scheme isn't shared ownership (as detailed in the link in the original post), why would a mortgage company have any objections to this? it is shared ownership because you only own 75%
EDIT: Also I think you'll find the deposit that most people use is formed from the equity in their current property.If you find yourself in a fair fight, then you have failed to plan properly
I've only ever been wrong once! and that was when I thought I was wrong but I was right0 -
Where this idea falls down is the price of the house you are buying. Virtually no-one pays 265k for a house. The stamp duty hike (from 1% to 3% of total) at 250k means that any house "worth" 265k will sell for 250k max.
Look at the figures 265k + 3% stamp duty is 272,950. 250k + 1% stamp duty is 252,500. So the house has been overpriced by 20,450.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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