Own Home Scheme Pros and Cons

stanleyfox69

Thanks for the info Fogma.

Congrats on the acceptance of your offer also. You must keep us updated on your progress.

I've been waiting for my OH to start Full Time work in the Police force and have had an eye on a house for the past 4 months.
OH has been a temp in Police force for a year (Desk Job) whilst the applications/interviews etc went through. After OH's temp contract ran out in March, then got another temp job with NHS. So until employed Full Time, can't do anything . . .

Typically though, OH's start date is 27th April, and on the 9th April, the house we were after accepted an offer and is now Sold STC.

Might sound harsh, but am hoping to Gazump the current bidders in the hope that the sellers would prefer a 'cash' deal with us (no chain) against waiting for their buyers to sell before moving.
I know for a fact that the sellers are wanting a quick move . . so fingers crossed.

It's s*d's law that a couple of weeks before OH starts, they accept an offer. Nevertheless, was on the phone to ownhome 'advisers' and have re-booked eligibility interview and hope to get the ball tumbling down the hill as fast as possible to get in whilst we can.

Really really really do not want to lose this place . . .it's perfect.

Keep us updated with your progress.

michael1983l

fogma wrote: »

Hi,

Not sure if i can help too much, we were just offered the mortgages that are listed on their website.

We are applying for a 75% mortgage which would have enabled us to go for the better tracker/discount rates but have decided to go for a fixed rate for peace of mind, even though the rates are the same as having a 90% mortgage and have a £995 application fee.

On the more detailed ownhome leaflet that they send you in the post, it says that you can only take a 25 year mortgage but the coop said we can definitely have up to 35 years which we have taken so as to reduce our monthly repayments to try and pay back the equity loan asap.

We've just had an offer for a house accepted and are currently having our mortgage approved as it didn't go through straight away (apparently 90% of places for people mortgage applications have to go to the co-ops underwriters before being accepted). Hopefully there won't be too many problems with the credit checks!

I'll keep you posted how we get on if anyone's interested...

I'd certainly query thatwith the Own home scheme, as I was made aware by them that I could only take a 25 year mortgage maximum as this is the term of the loan from own home. Your mortgage term cannot exceed the term of your ownhome loan according to the T&Cs. I asked Co-op the same question and they said yes to me also, but I looked it up and stuck with 25 years so own home had no reason to refuse the loan.

thinksaving

michael1983l wrote: »

I have had no mention of nil deposit at exchange from the scheme, maybe they have adjusted the way they operate now. As if you cannot afford to pay a deposit then how could you possibly raise this money for 10 days?

Ownhome doesn't mention that the "nil" deposit will have any implications. You will only find that out when your solicitor flag this issue. It is a contractual requirement that conveyancing solicitors try to get all the buyers to adhere to.
We have decided not to use solicitors as recommended to us by the Co-op as their prices were very expensive and have gone with solicitors that do not have experience with this scheme - that might be the glitch for us.
However, even if we went with the recommended solicitors they would still would have needed to negotiate with the seller's solicitors to see if the sellers would be ok with a nil deposit at exchange. This is for security purposes for the seller and could also affect the rest of the chain as they might need the deposit towards their purchase etc. I have read on various solicitors' websites that this is common practice and it might be that the sellers can't go ahead with the purchase if they need your deposit and you can't give them one at exchange.

Our solicitor is currently negotiating this issue and has recommended to us that we try to "borrow" this money from family until completion goes through after which they will repay the difference when all monies have been received at completion. We have spoken to Places for People about this issue and they just said that sometimes the sellers do require a deposit and that it's then up to us to decide what we need to do.

Anybody out there that have experience with getting around the "nil deposit at exchange" issue when you are not actually putting down any money of your own? For those of you that have missed my previous post to this thread Places for People only pays their part of the loan one day before completion and requires at least 10 days between exchange and completion. We only found this out after our offer has been accepted and our mortgage approved in their "funding secured" letter to us in the Solicitors' Guidance Notes.

Will see how this goes.

michael1983l

I have spoken to the co-op today about this issue of nil deposit and they have said all that is required is to exchange 10 days before completion then the transfer will go through on completion. They said you don't have to do both on the same day.

Wickedkitten

thinksaving wrote: »

Anybody out there that have experience with getting around the "nil deposit at exchange" issue when you are not actually putting down any money of your own? For those of you that have missed my previous post to this thread Places for People only pays their part of the loan one day before completion and requires at least 10 days between exchange and completion. We only found this out after our offer has been accepted and our mortgage approved in their "funding secured" letter to us in the Solicitors' Guidance Notes.

Will see how this goes.

Completely unrelated to the ownhome scheme, but you can get your solicitor to liaise with theirs and say you won't have a deposit at the time of exchange, but if possible see if you can exchange and complete on the same day.

stanleyfox69 wrote: »

Might sound harsh, but am hoping to Gazump the current bidders in the hope that the sellers would prefer a 'cash' deal with us (no chain) against waiting for their buyers to sell before moving.
I know for a fact that the sellers are wanting a quick move . . so fingers crossed.

You aren't a cash buyer unless you are buying with cash and don't need a mortgage. Not only do you need a mortgage but you are on a shared ownership scheme that might not be quick depending on fund allocation.

stanleyfox69

Cash in the sense that upon allocation of funds, the transaction would/could be completed quicker to that of someone trying to sell their own home in order to purchase another.

fogma

michael1983l wrote: »

I'd certainly query thatwith the Own home scheme, as I was made aware by them that I could only take a 25 year mortgage maximum as this is the term of the loan from own home. Your mortgage term cannot exceed the term of your ownhome loan according to the T&Cs. I asked Co-op the same question and they said yes to me also, but I looked it up and stuck with 25 years so own home had no reason to refuse the loan.

I've just asked ownhome and they said it's up to co-op what mortgage they offer you so I hope it won't be a problem!

michael1983l - do you mind if I ask you what stage you are at with the scheme? we have to move out of our rented place by a certain date and we're starting to worry we won't complete in time. Just wondering if you have any timescales regarding the co-op's valuation report and what we'll need to do regards booking a survey?

thanks

blunt_crayon

fogma wrote: »

Hi,


On the more detailed ownhome leaflet that they send you in the post, it says that you can only take a 25 year mortgage but the coop said we can definitely have up to 35 years which we have taken so as to reduce our monthly repayments to try and pay back the equity loan asap.

fogma, how much extra is this 35 years going to cost you?

100k @ 6% over 25 years = total repayment 190k
100k @ 6% over 35 years = total repayment 235k :eek:
is the money you will save to pay off the equity loan more than the extra 45k in interest you will pay over the life of the mortgage??

fogma

blunt_crayon wrote: »

fogma, how much extra is this 35 years going to cost you?

100k @ 6% over 25 years = total repayment 190k
100k @ 6% over 35 years = total repayment 235k :eek:
is the money you will save to pay off the equity loan more than the extra 45k in interest you will pay over the life of the mortgage??

We want the minimum monthly repayments possible over the next 5 years so that we can live comfortably and afford the extras like insurance and repairs etc. If we decide we are able to save money to pay off the equity loan or to overpay the mortgage or to save for a deposit then that will be great.

We will hopefully be earning more money after that point so will be happier to remortgage for a lower period of time at that point, whether in the same house or most likely on another.

For us, the short term benefits outway the long term gains and we dont envisage keeping the mortgage for anywhere near the 35 years, it is a way to get a foot on the ladder in an affordable and manageable way.

Advice and opinion are welcome!

Wickedkitten

stanleyfox69 wrote: »

Cash in the sense that upon allocation of funds, the transaction would/could be completed quicker to that of someone trying to sell their own home in order to purchase another.

That's not cash at all, you are just a FTB with no chain. If you are wanting for them to take you seriously and you are planning on gazumping someone (Why you would want to do this in a falling market when you haven't a clue how much the other buyer has offered is best left for another thread) then I would suggest not using the term cash buyer if you aren't paying in cash.