Own Home Scheme Pros and Cons

Wickedkitten

miketong wrote: »

The reason for this is that by sharing the ownership you are essentially sharing the risk, in a falling housing market the you'd lose less money if you find you want to sell before the house price has recovered. This is because after 5 years, you buy them out at the current market value not the value at which you bought it even if this is less. In this case, you'd essentially had 40% of your mortgage payments paid for you for free!

Yes and if it rises quickly you end up paying more than you borrowed as well as having to make up that 40% gap on your next step up the ladder.

janie63

My daughter and fiance have been turned down for this because they apparently earn 'too much' money!!

J_Devon

Not at top price? This is true, but it seems that its also not at the bottom...Are you in a rush to move? Can you hold off 6-12 months if necessary? The £xxxx that you save on the asking price could help pay a deposit and/or reduce the loan that you'll need to top your mortage up.

Another thing to consider is that with Ownhome, you are tied into using The Co-operative banks mortgages. Have you considered the scheme MyChoice Homebuy? As with the Ownhome scheme, you can choose a house on the open market but they also let you pick your own mortage lender, and do not limit you to just one provider as with the Ownhome.

Its been mentioned on several other threads that these schemes are the goverments way of keeping house prices artificially high. Remember they will make their % from you somewhere along the line, but if you feel its the right choice for you, go for it and good luck! Be sure to keep us updated on your progress

Wickedkitten

janie63 wrote: »

My daughter and fiance have been turned down for this because they apparently earn 'too much' money!!

Aren't these meant to "help" people on low incomes?

dannymccann

This is the sort of scheme we are looking at as well, assessing all our options. We have seen an IFA about it, and generally it was recommended only if we couldnt find extra deposit, but it was recommended over VGD's (VendorGiftedDeposits, only available at Halifax nowadays). I expressely said that I would not want more than 25% share going to the HomeBuy/OwnHome schemes, its just too big a portion of equity

catd_3

Thanks Big Simmo for letting me know - I called back last week and they said it would be a godo few weeks and you are obviously well ahead of us...I think they are just fobbing us off - hopefully will get called back.

Thanks for everyone's views on this (the helpful ones that is!) We have also registered for the MyChoiceHomeBuy scheme. Obviously the ideal is to buy outright and not use a scheme but with LTV being so restricted we cannot realistically raise a £20,000 + deposit so this is our only option really. And yes I appreciate people saying prices may drop more in 6-12 months - but in that time we have paid another £10000 in rent....it all balances out.

I hope we get somewhere with either of these schemes as I do think they are valuable - and good luck to other people trying too.

Maseillo

Hi
Just to let you know that we bought our house in this scheme (I actually answered this thread a while ago while we were waiting for our phone interview). We waited about a month for our phone call, and from then on it went really smoothly. We got accepted, got given a reference number and then called the co-op and got accepted for the mortgage. Ownhome and the co-op were both great and our house purchase went through very smoothly and very quickly. There were no problems at all. Of course it would have been better to buy by ourselves but we just couldn't do it, so for us this was the best option. We are all settled in our new house now and couldn't be happier! Plus a few weeks after we moved, ownhome wrote to us saying they had been given some extra money and were giving grants to people who had completed their house purchase within a certain time - and promptly sent us a cheque for £1500! That was an extra surprise! Don't suppose they will still be doing that now though.
Anyway just wanted to let you know that they will call you back, and if you go ahead with it then it can go through nice and easily!
SJ x

londongirl

Maseillo - well done on getting the £1500 - i called them up after seeing you post that on another thread as i think before this we both thought we had missed out on this. I missed out by 5 days in the end!! I remember you saying you completed about 28th November is that right? I completed 5th December and was told the grants were given up to 30th November ! So close - could have done with the extra money of course! But pleased for you that you got it!

pandamonia

Problem with this scheme is the coop, their mortgages are !!!!, totaly crap and totally ripping the people off who are trying to be helped by this scheme.

5-6.5% fixed rates with a base rate of 1.5 which is due to fall to near Zero!

4.5 fixed with nearly £1700 fees to pay!!!!

this is whats called day light robbery! - totally taking advantage of the customers who are wanting to benefit from the scheme.

why you must have a Coop mortgage is beyond me.

londongirl

I think i was lucky at the time i got my mortgage agreed - i got a tracker 0.99 per cent above base rate with co op and no fees at all either. I think they have pulled all their tracker rates at the moment.
The coop aren't the most competative but not the worst either and their customer service is brilliant.