Own Home Scheme Pros and Cons

James1

Hi this is my first post on the website. I have been following this blog for a while and found it most helpful. I applied to Ownhome in the beginning of March and have just got an interview date which we have booked in for next Tuesday.
The only problem is that we have been given notice by our landlord and have signed up to let another property for 6 month contract starting on the 13th August. When i spoke to a guy from Ownhome he said that if our loan is approved we have about 3 months to spend it. I questioned this with him and said that i thought we had up to 6 months. His reply was taht the funds might run out buy then?
This has left us not sure about how we work this out. We defintely don't want to miss out on buying a house. but don't want to have to pay out a extra months rent.
Any advice is certainly welcome.

James

blunt_crayon

James1 wrote: »

Hi this is my first post on the website. I have been following this blog for a while and found it most helpful. I applied to Ownhome in the beginning of March and have just got an interview date which we have booked in for next Tuesday.
The only problem is that we have been given notice by our landlord and have signed up to let another property for 6 month contract starting on the 13th August. When i spoke to a guy from Ownhome he said that if our loan is approved we have about 3 months to spend it. I questioned this with him and said that i thought we had up to 6 months. His reply was taht the funds might run out buy then?
This has left us not sure about how we work this out. We defintely don't want to miss out on buying a house. but don't want to have to pay out a extra months rent.
Any advice is certainly welcome.

James

hi james,

i'm a bit confused by your question? if i've got this wrong then i apologise but it sounds like you believe that the money is put aside for you when you apply to ownhome. this is not the case: you are not allocated the loan from places for people until you have an offer accepted on a house, up until this point there is no guarantee they will be able to loan you the equity share. once you get this money allocated the offer does expire, although someone else will have to confirm the exact period, as i don't know for sure - 3 months sounds right to me though. your mortgage offer also expires after 3 months but this can be rearranged however when the places for people loan expires you would have to submit another offer and there is a chance that the funding will have run out. however the funding could also run out before you get any allocated to you. if you have signed a 6 month tenancy starting august then i assume you would be looking to buy at the end of this year otherwise you will be paying both rent and mortgage for some time? in which case you cannot go putting in offers on property as you are not ready to buy therefore no funds will be allocated to you and then by the end of the year there is a good chance the funds will have run out as the scheme is very popular. it might not have though, i am just speculating as that is what happened last year. as you have signed a 6 month tenancy maybe your best bet would be to let that go periodic (i.e. on a month by month basis) when the fixed tenancy ends in february and then start looking for a house to buy when the next years' funding starts. your application with ownhome would remain valid, once you get a letter of eligibility etc they will have your details and you just need to ring them every 3 months or so to update your details and remind them you're there :-)

if i have completely misunderstood then please ignore my ineffective babble...

superfran_uk

James - once an offer is confirmed, the funding will be held for three months while you do all the work in order to exchange/complete. However I think that if you took three months finding a house, although there wouldn't be a guarantee of funding at the end of it (this is of course a popular scheme and by then it will be long into the fiscal year), you would have then taken 6 months - so don't knock it just yet.

If i were you I would have let the tenancy go onto to a rolling one - is it too late to request this of your landlord? Is he a reasonable chap?

rebecca410

We received our mortgage offer from the co-op two weeks ago and we are still waiting for the offer from places for people I rang them and they said they are dealing with around 20 new mortgage offers coming in a day. They also said it will take 14-21 days from the day we received our mortgage offer from co-op so should be this week. We were hopefully looking to exchange by the end of next month but doubt this as the vendors are on holiday last week July first week of August. So unless we exchange before then it will be second week in august but I suppose it is not that big a deal as long as I have a house to move into at the end of it. It has been quite a lenghty process from when it started back in April and there has been constant things along the way that have put more time on the process, but to anyone looking to buy this is a great scheme just make sure you fully understand the scheme before you apply. The time process can vary for everyone such as Superfran I think she started around the same time as me Congratulations on exchanging next week, can't wait til I am there too.:beer:

James1

superfran_uk wrote: »

James - once an offer is confirmed, the funding will be held for three months while you do all the work in order to exchange/complete. However I think that if you took three months finding a house, although there wouldn't be a guarantee of funding at the end of it (this is of course a popular scheme and by then it will be long into the fiscal year), you would have then taken 6 months - so don't knock it just yet.

If i were you I would have let the tenancy go onto to a rolling one - is it too late to request this of your landlord? Is he a reasonable chap?

Hi Superfran
Our landlord already gave us an extension until Aug so we could move into the other place we found. So there is no option than to move in Aug.
However it is on a poplular estate and i think if we talked to the landlord and offered to pay his advertising costs for him to get another tenant, i am sure he will be able to let the property out again quickly.
One way or another i am determined to work through this.
Thank you for your advice.
James

Steven.Morris7

hi,

I don't post much, but I've been keeping an eye on this thread since January.

We applied for the scheme in January.

Received the letter of instruction to arrange the interview at the end of May, Got through the telephone interview the following week & within 18 days found a house, got the offer accepted & have the mortgage sorted in principal.

I'm now at the stage of solicitors etc, but will have to keep them on hold until we know for sure funding is available....

Touch wood, the process so far has been good. Both the Co-Op and P4P have been good... We have a great deal from the Co-Op actually saving us £210.00 a month in comparison to our rent!

Both us & the seller have no chain, so if P4P get back to me confirming the funds we should be good to go asap!

Good luck to everyone else out there, whatever stage your are at! Everyones posts are really useful!

Cheers, Steve

Leroyjenks

Hi

I have been offered a motgage at a fixed rate for 5 years at 4.69% which compared to one of 7% with abbey on ltv 95% and a higher fee is good. However as co-op are the only lenders what is stopping them from next time round increasing the rate on their products?

One thing i do not understand is it states "that you must get permission to make improvements to your home.this means we can instruct valuers to take to take the value of the improvements in to account when you come to make partial or full repayments". Does this mean you will increase the value lowering repayments ? Can someone please shed some light on these two things for me.

lee

Steven.Morris7

leroyjenks wrote: »

Hi

I have been offered a motgage at a fixed rate for 5 years at 4.69% which compared to one of 7% with abbey on ltv 95% and a higher fee is good. However as co-op are the only lenders what is stopping them from next time round increasing the rate on their products?

One thing i do not understand is it states "that you must get permission to make improvements to your home.this means we can instruct valuers to take to take the value of the improvements in to account when you come to make partial or full repayments". Does this mean you will increase the value lowering repayments ? Can someone please shed some light on these two things for me.

lee

Hi Lee!

I actually went for the 3 year tracker. Bit of a slight risk, but felt it would be safe enough for the next 3 years & the rate comes out at 2.89% which is amazing!

The way i view the improvements clause is that because they have a equity share in your property, they will want to make sure you don't do anything won't reduce the value... if you increase the value i'm sure they will be more than happy to take the equity share! :-)

I hope that helps!

superfran_uk

leroyjenks wrote: »

Hi

I have been offered a motgage at a fixed rate for 5 years at 4.69% which compared to one of 7% with abbey on ltv 95% and a higher fee is good. However as co-op are the only lenders what is stopping them from next time round increasing the rate on their products?

One thing i do not understand is it states "that you must get permission to make improvements to your home.this means we can instruct valuers to take to take the value of the improvements in to account when you come to make partial or full repayments". Does this mean you will increase the value lowering repayments ? Can someone please shed some light on these two things for me.

lee

Re: the mortgage, that's the chance you take, however they are a mainstream lender and it is unlikely that they would hike up the rates if others weren't. The tracker mortgages are bound to go up in the not too distant future but that will be for everyone, not just co-op.

The home improvements clause is so that any improvements you make, you will get the benefit of (value-wise) when you sell - you will not just get 60%-80% of the value. So if you put in a bathroom and improve the place by 10k (unlikely but it's just an example), that would be reflected in the amount you get back at the end. If you don't tell them, ownhome would take 20 - 40% of this depending on how much you borrowed - not very fair I am sure you will agree! Therefore you need to let them know.

sontoon

Just to keep everyone updated. Got our letter today and now really nervous as have our appointment booked for next tuesday. So hopefully here we go. Went on the waiting list on 6th March so 16 weeks and a bit