Help! Buying Guides & The 75% Mortgage Scheme

Chuffnuts

Help is appreciated!!


I’m in the hunt for a new property and although prices are dropping I believe there are still some major deals to be had out there. Plus I’m not looking to instantly make money on it, it’s a way of planning for a future with my girlfriend rather than making a quick buck.

I’m wondering if we have anyone on here who has any links with Linden Homes or the building trade, who can give me some inside information on there prices.

I went into the Sales office at a site in Southern area and was originally told the price was £259,000.00. Within minutes it had dropped to £210,000.00. I’ve yet to put an offer in but I believe the true value of the house is about £210,000.00. What sort of an offer would people suggest I go in at? Or when would the best time to put an offer in? Etc. . .

We’ve been given the option of a 75% mortgage for the 100% ownership of the house, providing we pay back the 25% outstanding balance (interest free loan) after a 10 year period. Anyone has any experiences with this?!

Help is appreciated!!

poppysarah

LOL I love the loan idea.

Will you have that sort of cash in ten years time?

Chuffnuts

Apparently after the 10 years your allowed to remortgage and pay them back.

_Andy_

On what basis do you believe the 'true' value is £210k?

lynzpower

Chuffnuts wrote: »

Apparently after the 10 years your allowed to remortgage and pay them back.

Chuff

I suggest you look into this in more detail.

"apparently" wont be good enough rfor your solicitor and im staggered that you are willing to make an offer using a scheme you dont seem to understand.

Chuffnuts

That’s what I believe it’s worth going on the local area, where its situated and on the properties specification. I’m no property maestro hence the reason of “help” at the forefront of my post

Lynzpower, dont panic for me just yet. Lol. This is in the extreme early stages, I've viewed the property just once and had a brief conversation with the sales lass. If I am definately going to go for it, I'll be studying it extensively.

poppysarah

Chuffnuts wrote: »

Apparently after the 10 years your allowed to remortgage and pay them back.

Soooooooo does it start to sound like a bad idea yet?

Incisor

Chuffnuts wrote: »

... I’m in the hunt for a new property and although prices are dropping I believe there are still some major deals to be had out there.

A fairly common outlook, but will those deals still look so good in 6, 12 months time?

Plus I’m not looking to instantly make money on it, it’s a way of planning for a future with my girlfriend rather than making a quick buck.

A stock argument from someone in your position, but you have missed saying 'Renting is dead money'. Try looking at this thread: http://forums.moneysavingexpert.com/showthread.html?t=1148651to see the arguments.

I’m wondering if we have anyone on here who has any links with Linden Homes or the building trade, who can give me some inside information on there prices.

I went into the Sales office at a site in Southern area and was originally told the price was £259,000.00. Within minutes it had dropped to £210,000.00. I’ve yet to put an offer in but I believe the true value of the house is about £210,000.00. What sort of an offer would people suggest I go in at? Or when would the best time to put an offer in? Etc. . .

We’ve been given the option of a 75% mortgage for the 100% ownership of the house, providing we pay back the 25% outstanding balance (interest free loan) after a 10 year period. Anyone has any experiences with this?!

Definitely look at the thread. The interest free loan is seductive, but it brings the price of the property towards its real resale value. If you want to move before 10 years [and despite what you say, it's probably over 50% that you will], you will have to find that money. If the resale value is 75% of what you accepted was the full value, you are suddenly going to feel conned [Like some did in previous bust cycles when they had bought on one of these deals] - because there very likely will not be the value in the house to sell on and pay off the mortgage and the 25% loan. Plus, if the market is in the doldrums in 3 or 4 years time, no one is going to want to buy a 75% share when there are plenty of houses around which you could buy 100%.

These schemes prey on the financial naivety of FTB's. Don't go rescuing builders from a hole of their own making at the expense of your freedom and flexibility to move.

PasturesNew

Chuffnuts wrote: »

75% Scheme

*SCAM
. . .

Incisor

Chuffnuts wrote: »

... If I am definately going to go for it, I'll be studying it extensively.

That's a hell of a big cart to pull such a little horse.

PasturesNew

Let's do some sums.

House £200k, you buy and pay for £150k of that and the other £50k of toxic debt lurks in your background.

In 2 years' time you've lost your job, but get offered a better one 200 miles away and need to sell. House is now worth £150k. You sell it, settle the mortgage, but the developers want £37,500 from you. Where will that come from?

In 5 years' time, your partner's left you and you want to sell. House is now worth £120k, your mortgage is £150k, you have to pay back £30k for the 25% (assuming the value is based on whatever that current value will be). So, to split up you will have to find £60k.

In 5 years' time you've had 2 kids, only got one wage coming in and want to sell up. Same scenario as above - you need £60k to bail out.

In 10 years' time the house is back to being worth £200k, yourself/your partner has had an accident/has a disability and you now want to move into a bungalow. Your mortgage is £150k-£15k you've paid off it (if you had a repayment mortgage), you sell the house for £200k and hand over the £50k, so you walk away with about £10k.

In 10 years' time they simply want the money. House is worth £200k again, your mortgage is £150k. You've kept your jobs but not had a significant rise in that time due to the economy being sh1te. But now you HAVE to raise an extra £50k in mortgage to pay the developers back.

Fit some possible scenarios and figures into it.