Own Home Scheme Pros and Cons

StephyB90

Hi just wanted a little advice really me and my partner are in a situation where we HAVE to move out (Parents splitting house being sold ect) we applied for MYChoice homebuy and eligability was accepted but as we are all aware NO FUNDIN so we are now on waiting list for own home.... we should be getting a letter through next week!! As we are eligable for my choice are we likely to be for own home? IFA had told use we can afford a combined loan form mychoice and chosen mortgage company of up to 140K but what people have said on here about own home it seems alot less :S Help Please

ladybird3

As long as you're a first time buyer or keyworker, you have a household income (you and your partner) of £60k or less, and you dont have any defaults or ccj's then you should be eligible
How long have you been on the waiting list for and where do you live? Ownhome will lend you 20-40% of the cost of the property however it's the co-op mortgage that is the tough bit, unless you have a 100% squeaky clean un tarnished credit history and no outstanding debts or masisve monthly outgoings then you need to be prepared for the fact that they may not offer you the full 4.5x income multiple (or 3.5x in a couple) that is usually indicated initially. Ownhome will ask you where you want to live and then tell you the minimum mortgage you can take out and the maximum cost the property could be (will depend totally on the area you want to buy in), you will also be limited to the number of bedrooms and the type of property you buy (no houseboats!).
As long as you're permanently employed and not in any kind of probationary period then the co-op will almost certainly lend you a mortgage but it just depends how much-read back over the last few pages to see how that works!

Good luck! :j

StephyB90

We have been on waiting list almost 8 weeks!! we live in Cambridgeshire!! We have got aloan betweem us but is small monthly payments and we pay ontime every month!! We got the loan for cars thinking we will still be living with his parents until its paid off, unfortunatly the unexpected happened and none of us saw it coming so now we are all in difficult positions Thank you :)

superfran_uk

The criteria are very similar to MyChoice Homebuy however as Ladybird has said previously, it's the mortgage which is throwing up the curveballs at the moment. You should check your online credit reports to make sure there are no nasty surprises, but if your credit is good and you just have a small debt, you should be ok.

I am a little concerned about your situation though - you say you need to move out - how long do you have? They are running behind almost everywhere so I wouldn't count on getting a letter next week - be prepared for it to take a little longer.

Once you have your letter, you will be invited to book an eligibility appointment. This could take place in a month (we booked ours back in mid-March, and had the interview at the end of April), or it could be longer.

After this, if you are eligible, you can start looking for a place, and be warned this can take months! Just to give a rough estimate, ours is completing next week (has taken just over 2 months) and this really is a best-case scenario as we were previously looking for a place for about 6 weeks under the homebuy scheme when it lost funding, so we had a property in mind and offered on the property the same day we had funding confirmed by Ownhome. The place is also vacant, and therefore there is no chain which can also affect how long it will take.

Hope this helps and it works out for you!

sontoon

Firstly I'd like to say superfran and ladybird your information has been invaluable to me, have been studying this thread for weeks.

Stephy we are also in cambridgeshire and applied to ownhome 2 days before we applied to MyChoice Homebuy, which we heard back from really quickly and thought we wouldn't be using the ownhome scheme but like you the funding run out on us two weeks before our application. We have been on the waiting list 16 weeks this friday and haven't heard anything yet, I rung saturday before last and was told we were at the top of the list as they were now starting on March applications.

My questions are, the stipulations on properties, do you know whether detached properties are allowed, I know the MyChoice you were only allowed up to a semi?

Secondly with regard to the co-op we had an AIP from nationwide on April 3rd, do you think this would affect anything with the co-op?

Thank you in advance and I shall keep reading with interest and let you know how we get on.

superfran_uk

I have not heard this 'no detached houses' rule in either scheme (you would need about £400k to get one round here so could be they just didn't think to mention it!), and it doesn't really make any sense as technically you could have a detached one bed place... although I always say you should quickly ring places for people and check for peace of mind - but I'd say if you can afford a detached on what they offer you (unlikely unless there's something wrong with it, or you have lots of kids perhaps) go for it!

The AIP shouldn't affect anything. We had a mortgage in principle from the Halifax prior to homebuy running out of funding and they didn't run a search as it didn't show up on my credit report. I think they just trust everything you say as true at that stage (thus why it's 'in principle'), if you lied and they turn you down later when they do check- well, that's your own fault.

dizzyblonde85

Just wondering if anybody has any experience of buying a new build house through the ownhome scheme as I know it is an option. Is the process very different? I am awaiting my letter, been told it should be this week.
Thanks

ladybird3

Glad all the info you've read on here is proving useful!! As iv said before when I first started going through the whole ownhome process this forum was really valuable to me so I think it's really important for everyone to share their experiences so we all know what we're letting ourselves in for!

As superfran has said you probably will need to be a bit flexible with the waiting times. Ownhome previously told me that they release appoinments in blocks so they have to wait for a 'block' to come round and then send out a heap of letters. Obvsiously it gets booked up fast so expect to wait a bit more for your appointment once you have your letter. I went on the waiting list middle of feb and was told it would be a 6 week wait-turned out to be 15 weeks! then another 2 waiting for the interview :eek: things have gone resonably swiftly but only because I had my eye on a property before hand so within a week of my interview I had viewed a load of properties, put an offer in, and had it accepted. Basically be prepared to wait a bit longer! Still though it isnt that long since the begginging of the financial year so I would think that funding is probs still ok if you're already on the waiting list

Bit of a tip for everyone, I was going to use a local solicitors just for comvenience when my offer was accepted however when I spoke to the co-op regarding my mortgage they gave me the number for the co-op legal services who have a solicitor who deals specifically with ownhome applicants. At first dismissed it as thought i'd end up paying over the odds for the services however when they sent me their quote through it turned out to be almost exactly the same as the local ones. It seems that not all agents and solicitors are familiar with the ownhome scheme so i'd say it probably pays to use a solicitor who is in order that no delays occur in your purchase. optima legal who are under the co-op umbrella have been really quick in dealing with my purchase and I have had nothing but advice and a good service from them.

As for the properties that you can buy I wasnt aware that you couldnt buy a detatched and im sure thats not the case at all. As long as the house fits into the criteria ownhome have set for you it should be fine. if you're buying just a regular property rather than a houseboat or something at auction then I think anything goes-one of the joys of the scheme is that you can buy on the open market.

New builds. . . not sure that anything differs. All I would say though is be careful that the developer doesnt have any criteria that they're setting, I looked at a fantastic new build that asked for a grand reservation fee, then 10% deposit at exchange which had to be no later than 28 days from reservation. Mortgages and surveys take time to arrange so it would have been easy to get caught out and loose that fee and the flat all together. Also they often have massively hiked service charges and this does get taken into account by the co-op when the assess affordability.

And on affordability (sorry i know iv been going on for AGES now!) while you dont have to pay any interest on your equity loan for the first 5 years the co-op actually assess your affordiabilty on your having to pay that interest from day one (£105 per month for years 5-10) I.E, even though you may be earning a ton more in 5 years time the co-op will work it out as if you're having to pay the mortgage AND the interest charge from year 1 rather than year 5. Crazy I know but this is just how they protect themselves I suppose.

Take the AIP with a pinch of salt, all that is is your income x 4.5 (or 3.5 for a couple), they dont do any credit checks or affordability assessments to get that figure it's just the absolute max IN PRINCIPLE that they could offer you. In reality it's possibly going to be less, so be careful when you're searching for somewhere or else perhaps make sure you have a little money stashed to cover any shortfallings.

keep the questions coming though everyone on here is happy to help and impart their wisdom!:j

rngeena

hello everyone.
I have a question which i really hope to get an answere. I have passed the ownhome criteria and based on where i live they have given me a maximum value for the property that i can buy which is 240000. I have now found a place which is around 7 miles away from where i live and the property price is 250000. The maximum that i can lend from co op 4.5 * my salary is 152000 which means that in theory i can afford to by this place.
I have a permanent job with no debts. Does anyone know how series the ownhome are about this maximum limit. Can i buy something which is 10000 high in what the maximum value they have quoted.Any anwere will really be appreciated.

tek-monkey

Put an offer in at £240k?