Own Home Scheme Pros and Cons

ladybird3

yeh optima have done everything so far, because a lot of the searches had already been done in the HIP I think they have only had to do a drainage search and environmental impact report all of which have been fine and i recieved those reports in the post yesterday.
They have also done the land registery checks and whatnot-all takes time though!

tressls

supposed to have our telephone interview next wk (only arranged it last sunday- got letter back in march wish id rang sooner!) but just rang out of curiosity and told no funding in the yorkshire area. damn! :-(

al_hunter

ladybird3 wrote: »

Not everyone applying for this scheme is on a low wage!
I earn above the average income in a very secure job following 3 years at university to get there.
Actually, saving up for a 5% deposit is extremley difficult even if you do get a good wage because the rental market is so inflated and that is not something which is going to change in the immediate future. Perhaps you haven't noticed that most lenders are now asking for at least a 20-25% deposit-pretty hard to save for I would say!

Given the current economic climate as you put it I would say that any fool can see that sticking all your money into savings is not in fact the sensible thing to do! Interest rates are at absolute rock bottom therfeore why put your cash into an account where it will sit and do nothing when there is an opportunity for it to go into bricks and mortar where it's likely in the future there will be a return on?

I think you're absolutely incorrect to say that schemes like this have caused the housing prices increase, aside from the fact that they have only been running for a couple of years I think it's clear to everyone who keeps an eye on any form of financial news that there is a lot more to it than that.

There are many areas in the country where even if the further drop in the market still wouldnt allow people to buy somewhere to live. Perhaps you think that people should move away from the more expensive areas and everyone who cant afford to buy should all move up north to where property is much cheaper? But then I wonder what a neighbourhood do without nurses, policemen, firemen, teachers, etc etc etc. . . . .
These schemes absolutely offer financial prudence. They give working people on average to above average incomes the chance to put there money into a long term investment. For me personally my mortgage payments on this scheme are going to be so low (in fact several hundred pounds less than the rent im paying now) I will be able to save up my excess income to buy into the equity loan-how is that not financially prudent?? I'm sure many other people are planning on doing the same and for those who have definate career progression and hence salary progression it is fantastic.
Perhaps you would prefer that the government spends taxpayers money on increasing social housing to house people who cannot or will not make any sort of financial contribution to society whatsoever? Oh no wait, they're doing that anyway and both the schemes to help first time buyers and keyworkers are being scrapped. You have you wish geoffky! I'm sure you'll be happy to know that your tax is now going towards paying for over a billion pounds of social housing

As for the housing market bottoming out in 3-5 years.. . . . . . . hmmmm think it might be a bit sooner! Anyone agree?

I haven't read your post in full but you are definitely wrong about lenders asking for 20-25% deposit. My partner and I bought a house only last month with 10% deposit. I was fortunate enough to be given some money but only about a third of my half of the 10%. My partner has been saving for the last year to accumulate it.

tressls

does anywhere let you only have a 5% deposit or am i dreaming? also can anyone point me the direction of homebuy direct or newbuild homebuy scheme threads altho looking way out of our price range for homebuy durect (via plumlife) by the property prices they are advertsing.

zoomy

themanbearpig wrote: »

Buying now is a lose-lose situation, unless you have a huge deposit and can get a good 10+ year fixed rate.

I'm sorry I cannot agree with you there!

I am in the situation whereby I have been doing an hour and a half commute twice a day so I could remain living with my parents and save a deposit. After 2 years I have some money saved but not enough for a big enough deposit to buy something that I would be happy living in.

I could stay where I am but I am really sick of the commute - it has ruined my social life and I find it quite stressfull so that leaves 3 options...

I could move jobs but I like my current job, it's interesting, it pays well and has good prospects

I could rent - looking at about £600 to £650pcm - I could just about afford this but I would not be able to save anything. 5 years down the line (when my fixed rate ends) I would have spent £36K and have nothing to show for it.

Instead I'm doing the scheme - my mortgage repayments will be £365pcm of which £3,600 p.a. (approx) is interest. At the end of 5 years I will have paid off about £4,000 - not a lot I know! BUT I intend to overpay as if I was renting giving me a further £14,000...

So, I'm doing the scheme! and very luckily I just squeaked through:T
You will no doubt claim that house prices are going to drop so the equity I have established will erode BUT given I will only own a 60% share of the property I have calculated that values would have to drop 20% (35% if you include the deposit I'm putting in) for me to be in negative equity.

ladybird3

al_hunter wrote: »

I haven't read your post in full but you are definitely wrong about lenders asking for 20-25% deposit. My partner and I bought a house only last month with 10% deposit. I was fortunate enough to be given some money but only about a third of my half of the 10%. My partner has been saving for the last year to accumulate it.

10% deposits are starting to creep back in, but they are a definately in a minority and many have extra conditions attached to them such as having to be a graduate/greater early repayment charges/larger arrangement fees etc etc
I would be curious to know what interest rate you got as the one thing I have noticed with the 90% mortgages is that the rates obviously are nowhere near as good as for lower ltv ratios

ozzyozzy

ladybird3 wrote: »

10% deposits are starting to creep back in, but they are a definately in a minority and many have extra conditions attached to them such as having to be a graduate/greater early repayment charges/larger arrangement fees etc etc
I would be curious to know what interest rate you got as the one thing I have noticed with the 90% mortgages is that the rates obviously are nowhere near as good as for lower ltv ratios

I had a little look around the other day - as i think funding in the london area for Ownhome will run out in the near future - or by the time i receive my 'letter' for pnone interview. The interest rates for 90% LTV are about 6 - 6.5% !! Not good at all bearing in mind if you put down say 25-40% you can get rates at 3 - 4 %. It basically means you pay £1000's in extra payments each year in london i need at least a £200k mortgage to get a reasonable house - thats £1000 per month for an INTEREST only mortgage. Repayment you are looking at £1300 / month. If you loose your job or your income suffers - you are technially f**ked :eek:

But thats what i am going to have to do by the looks of it - massive debts for the rest of my life . Ownhome eases the pain and gives you important leeway until things improve - so its a good scheme.....

Ozzy

StephyB90

I was just reading through the posts on this page and somebody put that tax payers should stop paying for theses schemes, well guess what the people that are going into theses schemes most of them work full time so therefore are paying tax so why should they not get something back from it???

Steven.Morris7

ladybird3 wrote: »

Got all the paperwork through from the solicitors yesterday to sign-contracts/deeds/boundary plans/agreement of sale etc etc etc, spent the entire evening going through it with a fine tooth comb but it's now all been signed and put in the post this morning.
Co-op rang me today to say the final offer will be sent out tommorow or monday at the very latest so hopefully it wont be too long before I have a rough idea of exchange and completion dates :j

Where is everyone else at?

Superfran how are you settling in?!

Sounds awesome. The Co-Op are sending the offer to us next Monday / Tuesday...

zoomy

I'm still lagging slightly behind you guys but have survey instructed and paid for (at long last following much hassling of the co-op!).

I go away tomorrow (camping in the rain!) for a week so hoping I should have the results by the time I get back!