Housing Options - Ownhome

workshy1980

Hi,
I am slowly slowly getting to my £20k (15%) deposit target and will have reached it by March at the current rate.
:beer:

Obviously, I want to save a bit on top of that for furniture, general costs etc but all in all am looking at buying next Summer.

Can anyone give me any tips about Ownhome? Has anyone here used it and encountered any pitfalls or general strangeness of which I'd need to be aware?

Also, and this is probably far more important, are my chances of getting the mortgage through Co-Operative bank reasonable? I had a default nearly two years ago now (will be over 2 yrs when I come to applying) and at the time I was pretty pants with paying generally. Have been faultless since then but I know that, especially "in the current climate", mortgages are harder to come by for those of us with dodgy pasts. Does the lower LTV caused by the equity loan to anything to offset my dubious credit history?

Any help hugely appreciated, thanks.

jojo80_2

Hi there- I have no idea about the default, but I have been through the Ownhome application system...

I've decided not to go ahead with the Ownhome application, because....
-too many constraints on number of bedrooms and size of house- I found a property with 2 bedrooms (which was allowed) and a 3rd room, literally 5 foot square, currently used as a laundry heap- I wasn't allowed to go ahead with an offer on this one because of the "extra room"....

-their way of working out what mortgage I could get gives me a rather small amount- basically using the Ownhome process I could raise a mortgage of £58,000, with their additional help on top taking it to around £93,000 I think.

-through a normal broker, I could raise a mortgage of £102,000

I know neither are huge amounts but I live in a relatively not-too-expensive area. The difference is I would own 100% of the property by raising my own mortgage, and only 60something% of the property by using the Ownhome route. For basically the same monthly repayments, (give or take 20 quid I think it was) I know I'd rather own the full lot and have a free choice over where I live.

Having said that, if you live in a more expensive area or if getting a mortgage is a problem, it might be a great option to you- at the end of the day there's no charge so you might as well investigate the possibilities.

Sorry I've rambled on a bit, hope it helps.

workshy1980

Thanks so much for that, it's really helpful. Can I ask how you found out what Co-Op would lend you? I assumed it was based on their normal lending criteria (ie 25k salary= a mortgage of over 100k), I take it that was not the case and that Ownhome customers are assessed differently?

poppysarah

Any lending criteria at the moment will be different next year. Keep saving you're doing well!

Maseillo

We are in the process of buying through ownhome and for its worked out really well. We had the telephone consultation and were told that we were eligible. We were told we could buy up to a 4 bed house (myself, my husband and 2 small children so one more bedroom that we needed) and they gave us a reference number. I then called the co-op and got a mortgage in principle for about £118,000, so our budget was £198,000 ish. I was worried we wouldn't get the mortgage as I missed 2 credit card payments this year (just because I'm forgettful!!) but it went through. We are buying a property that is £185,000 so the co-op said that ownhome deals in blocks of 5%, so we could either increase our mortgage so places for people are lending us 55%, or decrease it so they are lending us 60%. We chose to decrease it - propb not the best option long term but the lower our monthly payments are at the moment the better. Anyway, everyone I've dealt with has been fantastic. Our mortgage offer was with us a week and a half after finding our property! The valuation was done the day after we requested it and the results given to the co-op on the same day. We've just received all our paperwork from places for people too for the equity loan.

If you think it's the right route for you then I would give it a go. You might as well find out anyway - you don't have to use it even if they say yes. I had to wait about a month from when I enquired about it to actually having my phone consultation though as the waiting list was long so if I was you I'd put my name down for that while you think about it!

SJ

workshy1980

Thanks again for all your helpful advice. Ownhome is increasingly sounding like the best way for me to buy somewhere. I am buying on my own and am about to start a new job in a training position so the salary starts at about what I am currently earning (20500ish) but increases to 29000 over 3 yrs. I am hoping to start just paying the mortgage but,as my salary increases, to start paying off some of the equity loan too. Does this sound like an ok plan or is there some glaring flaw I am missing? Also, can I be really cheeky and ask how the amount Co-Op offered you compared with the amount their "how much could you borrow" function suggested? This works on 4.5x single person's salary or (I think) 4x a couple's annual income. As a total novice, I am clueless as to how much I am likely to be able to borrow.
Thanks again for your posts, I really appreciate hearing how others have found the whole experience

Maseillo

The co-op offered us the same as the "how much can you borrow" function on the website. It's the same as getting a regular mortgage with them. They lend you the same amount and you get to choose from their normal range of mortgages. The good thing is you get the best interest rate too as they take the equity loan part as the deposit so you get the interest rate than you would get if you had 25% or more deposit. You can make payments towards the equity loan whenever you like although it has to be in chunks (I think its in 5% chunks). Also every time you want to pay some off you will have to have the property valued (as its a percentage of the value that you will owe them) and you have to pay for that - so if I was you I'd probably put the extra money into savings until you have a big chunk to be able to pay off.

I would go for it if you think its right for your situation. But remember that funding is limited for each area and is first come first served so I would try and get something sorted sooner rather than later.

SJ